QUESTION 17 5 points Save Answer A purely monopolistic industry: O has no entry

Question

QUESTION 17 5 points Save Answer A purely monopolistic industry: O has no entry barriers. O has a downward sloping demand curve. produces a product or service for which there are many close substitutes. has a horizontal demand curve. QUESTION 18 5 pointsSave Answer The demand curve in a purely competitive industry is , while the demand curve to a single firm in that industry is perfectly inelastic, perfectly elastic downsloping, perfectly elastic downsloping, perfectly inelastic perfectly elastic, downsloping QUESTION 19 5 points Save Answer A firm reaches a break-even point (normal profit position) where: marginal revenue cuts the horizontal axis. marginal cost intersects the average variable cost curve. total revenue equals total variable cost. total revenue and total cost are equal

Explanation / Answer

The monopoly is characterized by single firms producing all the industry output at a price that is determined through downward sloping demand curve facing the monopolist. The monopolist has market power to influence the market price. The monopolist determines its equilibrium quantity by equating marginal revenue with marginal cost. The equilibrium price corresponding to the equilibrium quantity is determined from demand curve facing the monopolist.

Therefore, the correct option is: has downward sloping demand curve.

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A perfectly competitive firm acts as a price taker. That is it takes price as given by the market forces. Each firm maximizes its profit by equating marginal revenue to its marginal cost. In perfect competition the marginal revenue equals to the price. Therefore, each competitive firm maximizes its profit by producing the level of output for which its marginal cost equals to the market price. Each firm faces the horizontal demand curve given the fact that the firm can sell any amount at a given price.

Therefore, the correct option is: perfectly elastic, downsloping

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