1. XYZ Computer Company has a monopoly on the sale of a specialized color printe

Question

1. XYZ Computer Company has a monopoly on the sale of a specialized color printer. If it sells two of these printers its total revenue is $1000, and if it sells three color printers its total revenue is $1600. The marginal revenue of the third color printer sold is
Answer
$200
$300
$600
$1300

2.Marginal cost intersects average variable cost:
Answer
when average variable cost is increasing
when average variable cost is decreasing.
at the lowest point of MC.
at the lowest point of AVC.

3.The market structure in which the behavior of any given firm depends on the behavior of other firms in the industry is
Answer
perfect competition
monopoly
monopolistic competition
oligopoly.

4. Which of the following is ALWAYS true for a monopolist even if he is not maximizing profits.
Answer
P is equal to MC
P is greater than MR
MR is equal to MC
None of the above.

5. Comparing long-run equilibrium in monopoly to that in perfect competition we find that
Answer
the monopolist charges higher prices.
output is lower in the perfectly competitive equilibrium.
the monopolist can earn positive profits.
both answer 1 and answer 3 are correct.

6.Monopolistic competition differs from perfect competition primarily because
Answer
in monopolistic competition firms can differentiate their products.
in perfect competition firms can differentiate their products.
in monopolistic competition entry into the industry is blocked.
in monopolistic campetition there are relatively few barriers to entry.

Explanation / Answer

1. $600 2. "at the lowest point of AVC." 3. "oligopoly." 4. "P is greater than MR" 5. "both answer 1 and answer 3 are correct." 6. "in monopolistic competition firms can differentiate their products."

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