A monopolist always faces a demand curve that is:
a. perfectly inelastic.
b. perfectly elastic.
c. unit elastic.
d. the same as the entire market demand curve.
QUESTION 2Suppose the law of diminishing marginal utility holds for coffee. As a person drinks more coffee during the day, the total utility he or she receives will:
a. increase faster and faster.
b. fall steadily.
c. remain constant.
d. rise, but at slower and slower rates.
QUESTION 3The monopolist faces:
a. a perfectly inelastic demand curve.
b. a perfectly elastic demand curve.
c. the entire market demand curve.
d. all of these.
QUESTION 4The law of diminishing marginal utility exists for the first four units of a good if they have marginal utilities of:
a. 1, 2, 4, 8.
b. 8, 4, 1, 2.
c. 4, 8, 2, 1.
d. 8, 4, 2, 1.
QUESTION 5Which of the following is a difference between a monopolist and a firm in perfect competition?
a. The marginal revenue curve is downward-sloping.
b. Marginal revenue equals price.
c. Economic profits are zero in the long-run.
d. The marginal revenue curve lies above the demand curve.
QUESTION 6If the first four units of a good consumed have marginal utilities of 8, 4, 2, and 1, respectively, this trend is an indication of the:
a. law of consumer equilibrium.
b. law of diminishing marginal utility.
c. law of diminishing consumer surplus.
d. law of supply.