In contrast to a perfectly competitive firm, a monopolist operates in the long run at a quantity of output at which:
a. P = MC.
b. MR = MC.
c. P = ATC.
d. P > MR.
QUESTION 2The utility of a good measures its satisfaction rather than its usefulness.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Under both perfect competition and monopoly, a firm:
a. is a price taker.
b. maximizes profit by setting marginal cost equal to marginal revenue.
c. will shut down in the short-run if price falls short of average total cost.
d. always earns a pure economic profit.
QUESTION 4Utils are used by economists to measure the satisfaction a person obtains from consuming a good.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5A monopoly sets a market price that is higher than the marginal cost of production. This fact implies that a monopoly's allocation of resources is:
a. unfair.
b. inefficient.
c. discriminatory.
d. excessive.
QUESTION 6The utility of a good measures its usefulness.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Which of the following is true about a monopoly?
a. A monopoly charges a higher price and produces a lower output level than if the market were competitive.
b. A monopoly is guaranteed an economic profit.
c. A monopoly charges the highest possible price.
d. A monopoly will shut down whenever losses are incurred.
e. All of these.
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