D) many firms produce the same product ) only one firm sells a product with no c

Question

D) many firms produce the same product ) only one firm sells a product with no close substitutes. 36) The price charged by a perfectly competitive firm is A) the same as the market price B) different than the price charged by competing firms. C) lower the more the firm produces. D) higher the more the firm produces. E) indeterminate. 37) Cynthia is an Oklahoma wheat farmer. The demand for her wheat is A) perfectly inelastic. B) inelastic but not perfectly inelastic. C) elastic but not perfectly elastic. D) perfectly elastic. E) unit elastio. 38) The demand curve for a monopoly is A) horizontal because the demand is perfectly elastic B) downward sloping. C) vertical because the demand is perfectly inelastic. D) upward sloping. E) undefined because it is the only supplier in the market. 39) If a monopoly wants to sell a greater quantity of output, it must A) lower its price. B) raise its price. C) tell consumers to buy more because it's a monopolist. D) raise its marginal cost E) change its fixed costs 40) A single-price monopoly has a marginal revenue curve that is A) horizontal and equal to price. B) downward sloping and below the demand curve. C) upward sloping and equal to the supply curve. D) downward sloping and above the demand curve. E) vertical at the profit-maximizing quantity 41) Monopolies arise when there are A) many substitutes but there are no barriers to entry B) no close substitutes and there are no barriers to entry. C) no close substitutes and there are barriers to entry. D) many substitutes and there barriers to entry

Explanation / Answer

Ans:

36) Option A

the same as the market price

In a perfectly competitive market all firms are price takers and firms sell the products at the market price regardless of the quantity produced.

37) Option C

elastic but not perfectly elastic

when the demand is elastic the change in the quantity demand is greater than the change in price.

38) Option B

downward sloping

The marginal revenue for each unit sold does not remain constant for a monopoly since the increase in the output will decrease the price and hence the monopoly faces a downward sloping demand curve.

39) Option A

lower its price

If the monopoly wants to increase its output then the monopoly must decrease its price.

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