chapter11_practice

chapter11_practice - Econ 01 Econ3100 Practice Problems for...

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Econ 301 Practice Problems for Monopoly and Market Power MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If a Frm is able to set price A) is a monopoly. B) it faces a downward - sloping demand curve. C) its marginal revenue is constant. D) it sells its output at a constant price. 1) 2) If the inverse demand curve a monopoly faces is p = 100 - 2Q, and MC is constant at 16, then proFt maximization A) is achieved by setting price equal to 21. B) is achieved only by shutting down in the short run. C) cannot be determined solely from the information provided. D) is achieved when 21 units are produced. 2) 3) The ability of a monopoly to charge a price that exceeds marginal cost depends on A) the price elasticity of supply. B) shape of the marginal cost curve. C) price elasticity of demand. D) slope of the demand curve. 3) 4) The more elastic the demand curve, a monopoly A) will have a larger Lerner Index. B) will earn more proFt.
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This note was uploaded on 04/10/2012 for the course ECN 100B taught by Professor Jamesbushnell during the Fall '11 term at UC Davis.

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chapter11_practice - Econ 01 Econ3100 Practice Problems for...

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