Which of the following is false?
a. A true or pure monopoly exists where there is only one seller of a product for which no close substitute is available.
b. The situation in which one large firm can provide the output of the market at a lower cost than two or more smaller firms is called a natural monopoly.
c. In monopoly, the market demand curve may be regarded as the demand curve for the firm because it is the market for that particular product.
d. A monopoly firm is a price maker, and it will pick a price that is the highest point on its demand curve.
QUESTION 2Since individual consumers do not know how much of the price they pay for a commodity is due to trade protection, consumers rarely lobby their political representatives to eliminate protection and reduce prices.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3State some of the policies adopted by the U.S. government to check petroleum prices.
QUESTION 4An increase in price, facing a perfectly competitive firm, means that the profit-maximizing output level will increase.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5When a monopolist is able to price-discriminate:
a. its profits tend to increase and its consumer surplus tends to fall.
b. both its profits and consumer surplus tend to increase.
c. both its profits and consumer surplus tend to decrease.
d. its profits tend to fall and its consumer surplus tends to increase.
QUESTION 6While it is possible to erect barriers to foreign competition and save domestic jobs, restricting international trade may impose large costs on an economy.
a. True
b. False
Indicate whether the statement is true or false
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