40. A monopolist a. can raise its price without losing any sales because it is t

Question

40. A monopolist
a. can raise its price without losing any sales because it is the only supplier in the
market.
b. can earn a greater than normal rate of return in the long run.
c. always charges a price that is higher than marginal revenue.
d. both a and b
e. both b and c

41. A firm with market power
a. Can increase price without losing all sales.
b. Faces a downward-sloping demand curve.
c. Is the only seller in a market.
d. Both a and b
e. All of the above
42. One method of measuring the extent of a firm’s market power is
a. the Lemer index.
b. price elasticity of demand for the firm’s product
c. income elasticity of demand for the firm’s product.
d. both a and b
e. all of the above

43. In a monopolistically competitive market,
a. firms are small relative to the total market.
b. no firm has any market power.
c. there is easy entry and exit in the market.
d. aand b
e. a and c
The next two questions refer to the following figure showing demand and marginal revenue for a
monopoly.
44. At any price above $ demand is elastic.
a. $5
b. $10 c. $15
d. $20
e. zero

Explanation / Answer

40.The correct answer is B.

41. The correct answer is D.

42. The correct answer is D.

43. The correct answer is E.

44. No data

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