tbch11 - CHAPTER 11 Monopoly MULTIPLE CHOICE Choose the one...

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CHAPTER 11 Monopoly MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question. 1) For a monopoly, marginal revenue is less than price because A) the firm is a price taker. B) the firm must lower price if it wishes to sell more output. C) the firm can sell all of its output at any price. D) the demand for the firm's output is perfectly elastic. Answer: B Diff: 0 Topic: Monopoly Profit Maximization 2) For a monopoly, marginal revenue is less than price because A) the demand for the firm's output is downward sloping. B) the firm has no supply curve. C) the firm can sell all of its output at any price. D) the demand for the firm's output is perfectly elastic. Answer: A Diff: 0 Topic: Monopoly Profit Maximization 3) If the inverse demand function for a monopoly's product is p = a - bQ, then the firm's marginal revenue function is A) a. B) a - (1/2)bQ. C) a - bQ. D) a - 2bQ. Answer: D Diff: 0 Topic: Monopoly Profit Maximization 4) If the inverse demand function for a monopoly's product is p = 100 - 2Q, then the firm's marginal revenue function is A) -2. B) 100 - 4Q. C) 200 - 4Q. D) 200 - 2Q. Answer: B Diff: 0 Topic: Monopoly Profit Maximization 5) If the inverse demand curve a monopoly faces is p = 100 - 2Q, then profit maximization A) is achieved when 25 units are produced. B) is achieved by setting price equal to 25. 1
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Chapter 11/Monopoly C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided. Answer: D Diff: 2 Topic: Monopoly Profit Maximization 6) If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization A) is achieved when 21 units are produced. B) is achieved by setting price equal to 21. C) is achieved only by shutting down in the short run. D) cannot be determined solely from the information provided. Answer: A Diff: 2 Topic: Monopoly Profit Maximization 7) If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then profit maximization is achieved when the monopoly sets price equal to A) 16. B) 21. C) 25. D) 58. Answer: D Diff: 2 Topic: Monopoly Profit Maximization 8) If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then maximum profit A) equals $336. B) equals $882. C) equals $1,218. D) cannot be determined solely from the information provided. Answer: D Diff: 2 Topic: Monopoly Profit Maximization 9) The monopoly maximizes profit by setting A) price equal to marginal cost. B) price equal to marginal revenue. C) marginal revenue equal to marginal cost. 2
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Chapter 11/Monopoly D) marginal revenue equal to zero. Answer: C Diff: 0 Topic: Monopoly Profit Maximization Figure 11.1 10) Figure 11.1 shows the demand and cost curves facing a monopoly. The monopoly maximizes profit by selling A) 0 units. B) 25 units.
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tbch11 - CHAPTER 11 Monopoly MULTIPLE CHOICE Choose the one...

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