A monopolist will have negative economic profits if The demand curve intersects
ID: 1215885 • Letter: A
Question
A monopolist will have negative economic profits if
The demand curve intersects the ATC curve in the region in which ATC is rising
A natural monopoly is the result of
Economies of scale
A profit-maximizing monopolist will set price
above marginal cost of production which results in allocative inefficiency for society
Like a firm in perfect competition, a monopolist
Predatory pricing is
an illegal attempt to eliminate competition by dividing up a geographic location with another firm without competing against each other
The price which maximizes total revenue for a monopolist
all of the above
A. the demand for its product is everywhere below the ATC curve B. marginal revenue is below marginal cost C. ... actually a monopolist can not earn a negative economic profit as there is no competition D.The demand curve intersects the ATC curve in the region in which ATC is rising
A natural monopoly is the result of
A. Patents B. Technology C. Ownership of a natural resource D.Economies of scale
A profit-maximizing monopolist will set price
A. equal to marginal cost but above marginal revenue B. equal to marginal revenue and marginal cost which is allocatively efficient for society C. equal to marginal revenue but above marginal cost which results in allocative inefficiency for society D.above marginal cost of production which results in allocative inefficiency for society
Like a firm in perfect competition, a monopolist
A. sets price higher than marginal cost B. maximizes profits when MR = MC C. faces (perceives) the market demand curve DPredatory pricing is
A. a legal attempt to eliminate competition by dividing up a geographic location with another firm without competing against each other B. a legal attempt to eliminate competition by temporarily lowering prices to drive out competitors C. an illegal attempt to eliminate competition by temporarily lowering prices to drive out competitors D.an illegal attempt to eliminate competition by dividing up a geographic location with another firm without competing against each other
The price which maximizes total revenue for a monopolist
A. is profit maximizing only if there are no marginal costs B. is profit maximizing C. is profit maximizing only if there are marginal costs D. is typically a higher price than the profit-maximizing price .all of the above
Explanation / Answer
A monopolist will have negative economic profits if
A. the demand for its product is everywhere below the ATC curve
/If demand curve falls below the ATC curve the revenue earned would be less than costs resulting in loss.
A natural monopoly is the result of
D. Economies of scale
/With a natural monopoly, average total costs (ATC) keep falling because of continuous economies of scale.
A profit-maximizing monopolist will set price
D. above marginal cost of production which results in allocative inefficiency for society
/ A monopoly has absolute market power, and thereby can set a monopoly price that will be above the firm's marginal (economic) cost
Like a firm in perfect competition, a monopolist
B. maximizes profits when MR = MC
/profit maximizing condition for monopoly and perfect competition is where MC=MR
Predatory pricing is
C. an illegal attempt to eliminate competition by temporarily lowering prices to drive out competitors
/The act of setting prices low in an attempt to eliminate the competition. Predatory pricing is illegal under anti-trust laws,.
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