Econ 1014 Exam 4 Study Guide

What is the definition of mark up a price minus the

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7) What is the definition of “mark-up? a) Price minus the average total cost b) Price minus marginal cost c) Marginal revenue minus marginal cost d) Marginal revenue minus average total cost e) None of the above
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8) Which of the following would be an example of a “barrier to entry” which would give a producer “monopoly power”? 9) Which of the following would be a reason for a monopolist to advertise? 10) When firms gain monopoly power, 11) Monopolists differ from perfectly competitive firms because: a) Monopolists maximize profit by producing as much as they want at whatever price they want to charge while perfectly competitive firms must produce whatever quantity is given to them by the market b) Monopolists can control the price they charge for their product while perfectly competitive firms must accept whatever price is determined by market supply and demand c) Monopolists produce only when MR>MC but perfectly competitive firms produce only where MR=MC d) All of the above e) None of the above Unit 5 Section 9: Natural Monopolies 1) A natural monopoly is a firm which gained monopoly power through: 2) If a firm wants to maximize its profits, it should always produce:
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