Answered: A pure monopolist’s demand curve: a.…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.1P

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Question

1. A pure monopolist’s demand curve:

a. Is perfectly inelastic

b. coincides with its marginal revenue curve

c. Lies below the marginal revenue curve

d. lies above the marginal revenue curve

2. For an imperfectly competitive firm:

a. The marginal revenue curve will lie above the demand curve

b. The demand and marginal revenue curve will coincide

c. The price and the marginal cost are equal

d. The price is greater than the marginal revenue

3. A monopolistic firm has a sales schedule such that it can sell 10 prefabricated garages per week at P10,000 each, but if the output is 9 per week it can sell these at P11,000 each. Using the information given, what is the marginal revenue of the tenth unit of sales per week is:

a. –P1,000

b. P9,000

c. P10,000

d. P1,000

4. Assuming no change in the determinants of demand, a pure monopolist usually increases the price while increasing the output simultaneously because it dominates the market.

True

False

5. In the long run a pure monopolist will maximize profits by producing that output at which marginal cost is equal to:

a. average total cost

b. marginal revenue

c. average variable cost

d. price

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