sociology

Topics: Monopoly, Economics, Marginal cost Pages: 4 (754 words) Published: April 24, 2014
Key for Homework 5
Question For a monopolist to sell more units of output,
Answer

the price must be increased.
the price must be reduced.
demand must become more elastic.
the other competing firms must sell fewer units.

Question In a monopoly, the market demand curve is
Answer

the same as the demand curve facing the firm.
the summation of all the individual firm s demand curves.
nonexistent.
the marginal cost curve above minimum average variable cost.

Question A monopolist maximizes total revenue when its marginal revenue is ________. Answer

positive
zero
negative
equal to price

Question For a monopolist, price
Answer

equals marginal revenue.
is less than marginal revenue.
is greater than marginal revenue.
can be greater than or less than marginal revenue.

Question When the demand curve is a downward sloping straight line, the slope of the marginal revenue curve is
Answer

always equal to one.
the same as the slope of the demand curve.
half as steep as the demand curve.
twice as steep as the demand curve.

Question For a monopolist, if total revenue increases as output decreases, then marginal revenue is Answer

equal to price.
zero.
positive.
negative.

Question Relative to a competitively organized industry, a monopoly produces

Answer

more output, charges higher prices and, earns economic profits. less output, charges lower prices and, earns economic profits. less output, charges lower prices and, earns only a normal profit. less output, charges higher prices and, earns economic profits.

Question Which of the following is NOT an example of price discrimination? Answer

Airlines charging lower prices to travelers who stay over a Saturday night Student discounts at movie theaters
Back-to-school sales
Discounted coffee for senior citizens at restaurants

Question Perfect price discrimination
Answer

is charging different prices to different buyers.
is an attempt by monopolists to capture...
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