Graphically, the marginal revenue curve of a monopolist:
a. will sometimes lie below the demand curve of the monopolist.
b. will always lie below the demand curve of the monopolist.
c. is the same as the demand curve of the monopolist.
d. will equal 1 when the elasticity of demand is unitary.
QUESTION 2The law of diminishing marginal utility indicates that the marginal utility curve is:
a. downward sloping.
b. upward sloping.
c. U-shaped.
d. flat.
e. vertical.
QUESTION 3Which of the following best explains why the monopolist's marginal revenue is less than the selling price?
a. To sell more units, the monopolist must reduce price on all units sold.
b. As the monopolist expands output, the average total cost will decline.
c. The monopolist charges each consumer the highest possible price.
d. When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.
QUESTION 4The law of diminishing marginal utility is the principle that the marginal utility curve ____ as people consume more of a product in a given period.
a. rises.
b. falls.
c. remains unchanged.
d. first falls and then rises.
QUESTION 5Which of the following is true for a pure monopolist?
a. The firm has a perfectly elastic demand curve.
b. The firm will always earn an economic profit.
c. The demand curve is above the marginal revenue curve.
d. None of these is true.
QUESTION 6According to the law of diminishing marginal utility, the marginal utility curve is ____.
a. vertical
b. flat.
c. upward sloping.
d. downward sloping.
QUESTION 7For a monopolist:
a. price equals average total cost.
b. price is above marginal revenue.
c. marginal revenue equals zero.
d. marginal cost equals zero.
e. average total cost equals marginal cost.
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