1.If the firm operates in the short run and goes out of business in the long run
ID: 1099566 • Letter: 1
Question
1.If the firm operates in the short run and goes out of business in the long run, then the price
A. must be between the shutdown point and the break-even point.
B. above the break-even point.
C. below the shutdown point.
D. may be anywhere.
2. A firm that has substantial monopoly power
A. confronts a perfectly-elastic demand curve.
B. can sell as much as it wants at the price it chooses.
C. can strongly influence the price that it charges for its output.
D. is one of only a few firms in the industry.
3. A public utility would be an example of
A. a natural monopoly
B. an unnatural monopoly
C. an unregulated private monopoly
D. a competitive monopoly
4. Monopoly profit
A. equals (price-ATC) times quantity sold.
B. equals price times quantity sold
C. exists only in the short run
D. exists because no entry barriers exist
5. The firm's long-run supply curve begins at the output of
A. 30
B. 40
C. 55
D. 70
Explanation / Answer
1 C. below the shutdown point. 2 C. can strongly influence the price that it charges for its output. 3 A. a natural monopoly 4 A. equals (price-ATC) times quantity sold. 5 C. 55
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