Which of the following statements is true? a. Since every good has some substitu
ID: 1254933 • Letter: W
Question
Which of the following statements is true?a. Since every good has some substitute, even if imperfect, the demand for a good produced by a monopolist will not have zero price elasticity.
b. A monopolist produces a good with an elasticity of demand that is perfectly inelastic because people can not do without the good.
c. Since the demand curve of a monopolist is downward sloping, the demand for the good must be inelastic.
d. Since a monopolist produces a good with no close substitutes, the elasticity of demand for the good is zero..
Total consumer surplus in a market is measured as the
a. area bounded above the market clearing price and beneath the market demand curve.
b. area bounded below the market clearing price and above the market supply curve.
c. vertical distance from the horizontal (quantity) axis to the market clearing price.
d. horizontal distance from the vertical (price) axis to the equilibrium quantity.
Some industries exist where, in order to enter the industry a firm must incur a large fixed cost before being able to start producing. Which of the following statements is true?
a. This industry will attract a lot of firms.
b. The government always produces these goods.
c. This creates barriers to entry and firms will earn monopoly profits.
d. This situation usually means that the government steps in and provides firms with startup costs.
For a monopolist
a. marginal revenue equals average revenue.
b. marginal revenue is less than price.
c. marginal revenue equals price.
d. marginal revenue is greater than price.
For a monopolist the reason that marginal revenue is less than price is
a. because the monopolist must lower the price of the good in order to sell an additional unit.
b. due to the U-shaped average revenue curve.
c. due to the perfectly elastic demand curve that the monopolist faces.
d. because of the lack of competition in the market.
Which of the following is not true about a tariff?
a. It affects imported goods.
b. It is a tax.
c. It is a barrier to entry in a market.
d. It leads to a natural monopoly.
Which of the following statements is true about the price that a monopolist charges?
a. The value that society places on the last unit produced in a monopoly is greater than its cost.
b. The difference between the price charged by a monopolist and a perfect competitor is due to differences in costs.
c. The price is the same as the price that would be charged if there was perfect competition.
d. Too much of the good is being produced in a competitive market and not enough is being produced in a monopoly. Due to the way that prices are set.
Explanation / Answer
Which of the following statements is true?
a. Since every good has some substitute, even if imperfect, the demand for a good produced by a monopolist will not have zero price elasticity.
b. A monopolist produces a good with an elasticity of demand that is perfectly inelastic because people can not do without the good.
c. Since the demand curve of a monopolist is downward sloping, the demand for the good must be inelastic.
d. Since a monopolist produces a good with no close substitutes, the elasticity of demand for the good is zero..
Total consumer surplus in a market is measured as the
a. area bounded above the market clearing price and beneath the market demand curve.
b. area bounded below the market clearing price and above the market supply curve.
c. vertical distance from the horizontal (quantity) axis to the market clearing price.
d. horizontal distance from the vertical (price) axis to the equilibrium quantity.
Some industries exist where, in order to enter the industry a firm must incur a large fixed cost before being able to start producing. Which of the following statements is true?
a. This industry will attract a lot of firms.
b. The government always produces these goods.
c. This creates barriers to entry and firms will earn monopoly profits.
d. This situation usually means that the government steps in and provides firms with startup costs.
For a monopolist
a. marginal revenue equals average revenue.
b. marginal revenue is less than price.
c. marginal revenue equals price.
d. marginal revenue is greater than price.
For a monopolist the reason that marginal revenue is less than price is
a. because the monopolist must lower the price of the good in order to sell an additional unit.
b. due to the U-shaped average revenue curve.
c. due to the perfectly elastic demand curve that the monopolist faces.
d. because of the lack of competition in the market.
Which of the following is not true about a tariff?
a. It affects imported goods.
b. It is a tax.
c. It is a barrier to entry in a market.
d. It leads to a natural monopoly.
Which of the following statements is true about the price that a monopolist charges?
a. The value that society places on the last unit produced in a monopoly is greater than its cost.
b. The difference between the price charged by a monopolist and a perfect competitor is due to differences in costs.
c. The price is the same as the price that would be charged if there was perfect competition.
d. Too much of the good is being produced in a competitive market and not enough is being produced in a monopoly. Due to the way that prices are set.
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