Refer to the graph when answering questions. Assume no price discrimination is f

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Refer to the graph when answering questions. Assume no price discrimination is feasible.« the next two Dollars unit Marginal Cost 6. What is the total revenue and total cost of the monopoly?+ (A) TR: CFGD, TC: DGH0 (B) TR: BEHO, TC: CFHO (C) TR: BEHO, TC: DGH0* D) TR: CIJ0, TC: CFH0* Average Total Cost Demand 7. What is the social deadweight loss caused by that monopoly?* (A) EHJI (B) EFI- (C) GFI (D) EGI- JK Quantity (units/week) Marginal Revenue 8. Given a downward-sloping linear demand curve, if total revenue decreases as quantity rises, marginal revenue must be (A) Positive and demand is elastic (B) Negative and demand is elastic (C) Positive and demand is inelastice (D) Negative and demand is inelastic* 9. How does the long-run behavior of the monopolist compare to that of the perfectly competitive firm?* (A) In order to prevent potential rivals from entering the market, the monopolist's long-run profits are lower than that of the perfectly competitive firm.* (B) Since the monopolist gets to set its price, its long-run price level is independent of demand.* (C) As the monopolist earns long-run profits, it will operate less efficiently than the perfectly competitive firm.* (D) In the long-run, output will generally be higher in a monopolistic industry, to crowd out new firms who want to produce.* 10. What is true about the demand curves in perfectly competitive and monopoly markets?*' (A) In monopolies, the marginal revenue curve and the average revenue curve are the same.+ (B) If the market demand curve is downward sloping, the market structure must be perfect competition. (C) In monopolies, the marginal revenue curve is steeper than the demand curve, and falls below it. * (D) With perfect competition, the market demand curve is usually horizontal.»

Explanation / Answer

Ans)
6.
Option (B) TR: BEHO, TC:CFHO
TR=BEHO
TC=CFHO
7.
Option (D) EGI
DWL=EGI Triangle
8.
Option (D) Negative and demand is inelastic
9.
Option (C)
AS the monopolist earns long-run profits,it will operate less efficiently than the perfectly competitive firms.

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