1. A monopolist will earn economic profits as long as his price exceeds: a) marg

Question

1. A monopolist will earn economic profits as long as his price exceeds:

a) marginal revenue

b) average fixed costs

c)average variable cost

d) average total cost

2. A monopolist will be able to earn positive pure economic profits regardless of the price elasticity of demand.

True

False

3. A monopolist always earns an economic profit.

True

False

4. A monopolist faces a downward-sloping demand curve because:

a) the demand for its product is inelastic

b) the industry demand curve is horizontal.

c) resource prices increase as the monopolist expands output

Explanation / Answer

1.a) marginal revenue

2.false

3.true

4.b) the industry demand curve is horizontal.

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