Economics MCQs

Page No. 297

The monopolist’s supply curve ?


adoes not exist


b is the marginal cost curve above average variable cost


cis the marginal cost curve above average total cost


dThe upward-sloping portion of the average variable cost


View Answer does not exist

The inefficiency associated with monopoly is due to ?


aunderproduction of the good


bthe monopoly’s profits


cthe monopoly’s losses


doverproduction of the good



Thomas is a monopolist in the production of your textbook because ?


aThomson has a legally protected exclusive right to produce this textbook


bThomson owns a key resource in the production of textbooks.


cThomson is a natural monopoly,


dThomson is a very large company



Which of the following statements about price and marginal cost in competitive and monopolized markets is true ?


aIn competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost.


b In competitive markets price equals marginal cost, in monopolized markets price equals marginal cost


cIn competitive markets price exceeds marginal cost, in monopolized markets price exceeds marginal cost


d In competitive markets price exceeds marginal cost in monopolized markets price equals marginal cost



When a monopolist produces an additional unit, the marginal revenue generated by that unit must be ?


abelow the price because the price effect outweighs the output effect


b above the price because the output effect outweighs the price effect


c above the price because the price effect outweighs the output effect


dbelow the price because the output effect outweighs the price effect



Which of the following is not a barrier to entry in a monopolized market ?


aA single firm is very large


bThe government gives a single firm the exclusive right to produce some good


cThe costs of production make a single producer more efficient than a large number of productions


dA key resource is owned by a single firm



A welfare loss occurs in monopoly where ?


aThe price is greater than the marginal cost


bThe price is greater than the marginal benefit


cThe price is greater than the average revenue


d The price is greater than the marginal revenue



In monopoly which of the following is true ?


aThere are many buyers and sellers


b There is one main buyer


c There is one main seller


dThe actions of one firm do not affect the market price and quantity



Barriers to entry do not include ?


a Patents


b Internal economies of scale


cMobility of resources


dHigh investment costs


View Answer Mobility of resources

In monopoly when abnormal profits are made ?


aThe price set is greater than the marginal cost


bThe price is less than the average cost


c The average revenue equals the marginal cost


dRevenue equals total cost



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