A single-price monopolist produces closer to the competitive level than a discriminating monopolist.
Indicate whether the statement is true or false
QUESTION 2Which of the following is an assumption of the monopoly model?
a. There exists a large number of buyers and sellers.
b. There are no close substitutes of the good.
c. The firm faces a horizontal demand curve.
d. There is free entry and exit of firms.
e. The firm is a price taker.
QUESTION 3In both perfect competition and monopoly, a firm:
a. maximizes profit by equating marginal revenue to marginal cost.
b. will shut down in the short run if price is less than average variable cost.
c. will always earn a zero economic profit.
d. will be characterized by both (a) and (b).
QUESTION 4When dealing with strategic trade policy, one practical problem for government is the likelihood of retaliation by foreign governments.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Price discrimination increases producer surplus for a monopolist.
Indicate whether the statement is true or false
QUESTION 6Which of the following market structures is characterized by a single firm and huge barriers to entry?
a. Monopolistic competition
b. Oligopoly
c. Monopoly
d. Monopsony
e. Perfect competition
QUESTION 7A monopolist can sell 7 units per day at 7 per unit, or 8 units per day at 6 per unit. Its marginal revenue for the eighth unit of output is:
a. 48.
b. 6.
c. 1.
d. -1.
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