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The monopolist determines the price and quantity combination

Paper help Economics The monopolist determines the price and quantity combination

Economics

The monopolist determines the price and quantity combination

The monopolist determines the price and quantity combination that maximizes short-ru… Show more Question 1 The monopolist determines the price and quantity combination that maximizes short-run profits by Question 1 options: determining the price by finding the highest price at which sales can be made and then using the demand curve to find the appropriate quantity. finding the quantity where marginal cost and marginal revenue are equal and then using the demand curve to find price. finding the quantity where average revenue and average total cost are furthest apart. finding the point where marginal revenue and demand intersect. This gives the price and quantity that maximizes profits. Question 2 A group of firms that try to work together to earn monopoly profits is called a(n) Question 2 options: monopoly. cartel. natural monopoly. public enterprise. Question 3 A monopolist has four distinct groups of customers. Group A has an elasticity of demand of 0.2, B has an elasticity of demand of 0.8, C has an elasticity of demand of 1.0, and D has an elasticity of demand of 2.0. The group paying the highest price for the product will be Question 3 options: D. B. C. A. Question 4 A barrier to entry is Question 4 options: the situation when the government produces a good instead of relying on private firms to produce the good. a restriction on the profits that a monopoly can make. a restriction on starting a business. a term used to explain why monopolies always make economic profits. Question 5 If a monopolist produces at a point where marginal revenue is more than marginal cost then Question 5 options: the firm should increase output. the firm should reduce output. the firm is maximizing profits. we do not know if the firm should increase or reduce without more information. Question 6 Considering the spectrum of market structures and moving from pure competition to pure monopoly we can say that: Question 6 options: entry barriers get lower but exit gets more difficult entry gets harder and the number of firms dwindles entry becomes harder but exit becomes easier none of the above Question 7 Monopolies misallocate resources because Question 7 options: price does not equal marginal cost. price does not equal average total cost. profits are usually positive. marginal cost does not equal average total cost. Question 8 Total consumer surplus in a market is measured as the Question 8 options: area bounded below the market clearing price and above the market supply curve. vertical distance from the horizontal (quantity) axis to the market clearing price. horizontal distance from the vertical (price) axis to the equilibrium quantity. area bounded above the market clearing price and beneath the market demand curve. Question 9 Which of the following is not a restriction the government imposes to keep potential entrants out of a market? Question 9 options: Patents Copyrights Imperfect capital markets Tariffs Question 10 To induce an increase in the quantity demanded of its product, a monopolist must reduce the Question 10 options: quality of its product and thereby generate a downward movement along its ATC curve. quality of its product and thereby generate a downward shift its ATC curve. price of its product and thereby generate a rightward shift in its demand curve. price of its product and thereby generate a rightward movement along its demand curve. • Show less

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