1)Because the demand curve for a monopolist is downward sloping: a)There is no l
ID: 1202686 • Letter: 1
Question
1)Because the demand curve for a monopolist is downward sloping:
a)There is no limit on the monopolist’s ability to make a profit.
b)The monopolist can sell as many units of its product as it wants.
c)The monopolist can sell its product at any price it wants.
d)The monopolist is a price-taker.
e)The monopolist has many price-output combinations.
2)A monopolistically competitive market consists of many sellers, an oligopoly consists of ______ seller(s), and a monopoly consists of ______ seller(s).
a)A few; many
b)One; two
c)One; one
d)A few; one
e)Many; one
3)In a price discrimination setting, people with the most inelastic demand:
a)Do not buy the good.
b)Pay either a higher or lower price.
c)Pay the same price as everybody else.
d)Pay the highest price for the same good.
e)Pay the lowest price for the same good.
4)Suppose you live in a small college town where, every weekend, ten independent food-cart owners set up shop and sell hot dogs on the street, they are popular with students, and where they frequently locate where students hang out. Suppose on evening you overhear the conversation of three of the food-cart owners as they conspire to raise the price of their hot dogs. The same night, you report the conversation to the Department of Justice via their antitrust complaint website. Why might the Department of Justice not end an agent to investigate the collusion attempt you witnessed?
a)Collusion among small competitors like street vendors is actually beneficial to consumers.
b)Antitrust laws are applicable only to collusion attempts that occur on federal government property and the collusion attempt occurred on private property
c)The Department of Justice lacks the resources to investigate every case of the collusion report.
d)To ensure small businesses a fair shot at competing with larger businesses, President Obama issued an official executive order to the Department of Justice in 2012 to stop pursing antitrust violations involving small businesses only.
e)There is not a law that prohibits collusion among competitors.
5)Firms in a monopolistically competitive industry produce:
a)Only industrial products-and no consumer products
b)Homogeneous goods and services.
c)Differentiated products.
d)Only consumer products-and no industrial products.
e)Monopolistic goods only.
6)A big difference between a competitive firm and a monopolist is that a monopolist:
a)Can always make positive economic profits.
b)Does not set marginal revenue equal to marginal cost to maximize profits.
c)Does not try to maximize profits.
d)Does not charge a price equal to marginal revenue.
e)Cannot set its price at the market price.
7)Both competitive and monopolistically competitive firms:
a)Can enforce price arrangements vigorously in court.
b)Cannot control or set their own price.
c)Can maximize profit by raising price.
d)Can maximize profit by producing to the point where marginal cost = marginal revenue.
e)Sell products that are identical.
Explanation / Answer
e) The monopolist has many price-output combinations. On every point of demand curve there is a price output combination. d)A few; one. Oligo means few and mono means one. d)Pay the highest price for the same good. When demand is inelastic quantity demanded dose not change even if there is big change in price. This gives a monopolist the power to charge high price in inelastic market. a)Collusion among small competitors like street vendors is actually beneficial to consumers. Because after collusion they will charge same price and no seller can charge higher than decided price. c) Differentiated products which are close substitues. d)Does not charge a price equal to marginal revenue.
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