To maximize its profits, a monopoly should produce the quantity where its margin

Question

To maximize its profits, a monopoly should produce the quantity where its marginal cost equals its:

Question 21 options:

A) average total cost.

B) average variable cost.

C) demand.

D) marginal revenue.

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Question 22 (1 point)

A monopoly:

Question 22 options:

A) faces the market demand curve which is downward sloping.

B) has a marginal revenue curve which slopes downward and lies below its demand curve.

C) will maximize profits by producing an output level where MR = MC.

D) all of the above.

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Question 23 (1 point)

Although a monopoly can charge any price it wishes, it chooses:

Question 23 options:

A) the highest price.

B) price equal to marginal cost.

C) the price that maximizes profit.

D) competitive prices.

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Question 24 (1 point)

The profit-maximizing output level for a monopolist is where the:

Question 24 options:

A) price is maximized.

B) output sold is maximized.

C) ATC curve is minimized.

D) MR = MC.

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Question 25 (1 point)

The goal of any monopolist is to maximize:

Question 25 options:

A) economic profits.

B) normal profits.

C) price.

D) output.

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Question 26 (1 point)

Compared to a perfectly competitive firm, a monopolist:

Question 26 options:

A) charges a higher price.

B) produces lower output.

C) fails to achieve an efficient allocation of resources.

D) all of the above.

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Question 27 (1 point)

In contrast to a perfectly competitive firm, a monopolist earns:

Question 27 options:

A) negative economic profit in the long run.

B) zero economic profit in the long run.

C) positive economic profit in the long run.

D) earns positive economic profit in the short run.

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Question 28 (1 point)

Firms in a monopolistically competitive industry produce:

Question 28 options:

A) homogeneous goods and services.

B) differentiated products.

C) competitive goods only.

D) consumption goods only.

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Question 29 (1 point)

Which of the following is a characteristic of the monopolistic competition market structure?

Question 29 options:

A) Many firms and a homogeneous product.

B) Few firms and similar products.

C) Few firms and differentiated products.

D) Many firms and differentiated products.

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Question 30 (1 point)

Monopolistic competitive firms in the long run earn:

Question 30 options:

A) positive economic profits.

B) zero pure economic profits.

C) negative economic profits.

D) none of the above.

Which of the following is true of a perfectly competitive firm?

Question 4 options:

A) The firm is a price maker.

B) If the firm wishes to maximize profits it will produce an output level in which total revenue equals total cost.

C) The firm will not earn an economic profit in the long run.

D) The firm's short-run supply curve is its MC curve below its AVC curve.

A) average total cost.

B) average variable cost.

C) demand.

D) marginal revenue.

Explanation / Answer

21 (d) always mr should equal to mc

22 (c) like above mr= mc

23(c) maximise profit by mr=mc

24(d)mr= mc

25(a)maximise economic profit

26(d) higher price and less production is characterstic of this

27(c) always earn profit in long run

28(b) goods are always different

29(d) many firms with different product

30(b) it earns normal profits

31(a) free entry and exit

32(a) firms earn only normal profit

33(c) always codition is mr=mc

34(a) free entry and exit is possible

35(c)many publisher publish the novel

36(c) actually it is mix of both

37(a) when firms are limited

38(c) product different

39(d) all of the above

40(a) many firms produce the identical goods

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