Quiz10 Key - output a stays the same b increases c...

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Resecon 102-3 Name:__________________ Quiz 10, December 10, 2009 Chapter 16 Mutiple Choice ( 2 points each ) __ B_ _ 1. Which of the following statements is correct? a. A competitive firm is a price maker and a monopoly is a price taker. b. A competitive firm is a price taker and a monopoly is a price maker. c. Both competitive firms and monopolies are price takers. d. Both competitive firms and monopolies are price makers. __B_ 2. Patent and copyright laws are major sources of a. natural monopolies. b. government-created monopolies. c. resource monopolies. d. antitrust regulation. __A_ 3. For a profit-maximizing monopolist, a. P > MR = MC. b. P = MR = MC. c. P > MR > MC. d. MR < MC < P. __C_ 4. When a monopolist increases the amount of output that it produces and sells, the price of its
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Unformatted text preview: output a. stays the same. b. increases. c. decreases. __C_ 5. Marginal revenue for a monopolist is computed as a. average revenue divided by quantity sold. b. total revenue divided by quantity sold. c. change in total revenue per one unit increase in quantity sold. Short Answer ( 10 points ) 1. Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods. Show this with a graph. A profit-maximizing monopolist chooses the output level where MR = MC and then chooses the corresponding price on the market demand curve. This is the same as in the Aplia problem we reviewed in class, though in this case you were not asked to show ATC or profit:...
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Quiz10 Key - output a stays the same b increases c...

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