Question 21 The following are correct statements about the Perfect Competitive m

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Question 21

The following are correct statements about the Perfect Competitive market structure, EXCEPT:

Question 21 options:

A. There are no entry or exit barriers.

B. The firms sell a standard product.

C. There are zero economic profits in the long run.

D. In the long run firms operate where Marginal Cost is minimized.

Question 22

The following are correct statements about the Monopoly market structure, EXCEPT:

Question 22 options:

A. If no price discrimination, a monopolist will set a higher price and produce less than a competitive market.

B. The monopolist maximizes profits if MR=MC and MC is increasing.

C. The monopolist maximizes profits if Pmkt=MC.

D. The monopolist could generate a higher total revenue if he can price discriminate.

Question 23

The following are examples of Barriers for Entry that could lead to Monopoly power, EXCEPT:

Question 23 options:

A. Limited demand

B. Economies of Scale

C. Technological innovations

D. Predatory Pricing

Question 24

In order for a Monopolist to be able to Price Discriminate, the following conditions are necessary, EXCEPT:

Question 24 options:

A. That the market covered by the monopolist is easily segmented.

B. That the monopolist can easily determine what is the maximum price each consumer is willing to pay

C. That the monopolist exhibits economies of scale.

D. That the product offered by the monopolist be no resalable.  

A. There are no entry or exit barriers.

B. The firms sell a standard product.

C. There are zero economic profits in the long run.

D. In the long run firms operate where Marginal Cost is minimized.

Question 22

The following are correct statements about the Monopoly market structure, EXCEPT:

Question 22 options:

A. If no price discrimination, a monopolist will set a higher price and produce less than a competitive market.

B. The monopolist maximizes profits if MR=MC and MC is increasing.

C. The monopolist maximizes profits if Pmkt=MC.

D. The monopolist could generate a higher total revenue if he can price discriminate.

Question 23

The following are examples of Barriers for Entry that could lead to Monopoly power, EXCEPT:

Question 23 options:

A. Limited demand

B. Economies of Scale

C. Technological innovations

D. Predatory Pricing

Question 24

In order for a Monopolist to be able to Price Discriminate, the following conditions are necessary, EXCEPT:

Question 24 options:

A. That the market covered by the monopolist is easily segmented.

B. That the monopolist can easily determine what is the maximum price each consumer is willing to pay

C. That the monopolist exhibits economies of scale.

D. That the product offered by the monopolist be no resalable.  

Explanation / Answer

Question 21

D.

In perfect competition, firm's operate at the profit maximization point where MR=MC.

Question 22

C.

Monopolist maximizes profit where MR=MC and extended to the demand curve.

Question 23

A. Monopoliies have unlimited demand. That is the reason why they exist. There are very few or no competitors for a monopoly.

Question 24

C. Price discrimination is charging different prices to customers and is not based on cost of production.

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