Question 6 (1 point) When a pure monopolist is in equilibrium, price(P) will: Qu

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Question 6 (1 point)

When a pure monopolist is in equilibrium, price(P) will:

Question 6 options:

a. be less than MR.

b. be greater than MC.

c. equal MR.

d. equal MC.

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Question 7 (1 point)

Given the same unit cost data, a monopolistic producer will charge:

Question 7 options:

a. the same price and produce the same output as a competitive firm.

b. a higher price and produce a larger output than a competitive firm.

c. a higher price and produce a smaller output than a competitive firm.

d. a lower price and produce a smaller output than a competitive firm.

Question 16 (1 point)

Some Oligopolistic industries(or markets) are characterized by:

Question 16 options:

a. a few large(or dominant) firms and substantial entry barriers.

b. a few dominant firms and no barriers to entry.

c. a large number of firms and low entry barriers.

d. a few dominant firms and low entry barriers.

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Question 17 (1 point)

Oligopolistic firms:

Question 17 options:

a. are characterized by a relatively large number of small sellers.

b. may produce either standardized or differentiated products.

c. always produce differentiated products.

d. always produce standardized products.

a. be less than MR.

b. be greater than MC.

c. equal MR.

d. equal MC.

Explanation / Answer

(Question 6) Option (b)

A monopolist maximizes profit by equating MR with MC. Since demand curve lies above MR curve, when MR = MC, P > MR and so, P > MC.

(Question 7) Option (c)

A monopolist maximizes profit by equating MR with MC. A perfect competitor maximizes profit by equating Price with MC. Since demand curve of monopolist is downward facing and lies above MR curve, when MR = MC, P > MR and so, monopoly price > Competitive price and monopoly quantity < Competitive quantity.

(Question 16) Option (a)

Few large firms dominate the market by means of barriers to entry.

(Question 17) Option (b)

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