8. The marginal revenue curve for a price setter will always: A) bisect any hori

Question

8. The marginal revenue curve for a price setter will always:

A) bisect any horizontal line drawn between the vertical axis and the demand curve.

B) bisect any vertical line drawn between the horizontal axis and the demand curve.

C) lie above and to the right of the demand curve.

D) be less steeply sloped than the demand curve.

14. In response to an increase in demand, a monopoly firm would probably _______ price and _______ quantity.

A) increase; decrease

B) increase; increase

C) decrease; increase

D) decrease; decrease

15. Economic profits:

A) will always exist for monopoly because of significant barriers to entry.

B) will not exist in the long run in perfect competition because of easy entry into the industry.

C) are determined by the vertical distance between price and average total cost.

D) are correctly describe in A and B.

17. If a monopoly is forced to charge a price = MC:

A) output will fall.

B) resource allocation will improve.

C) the monopoly will incur an economic loss.

D) all of the above will occur.

18. In perfect competition,. price will _______ marginal cost. In monopoly, price will _______ marginal cost.

A) exceed; equal

B) equal; exceed

C) equal; be less than

D) be less than; exceed

30. Economists generally agree that if the ______ of consumer protection ______ the ________, the regulations should be _______.
A) costs; exceed; benefits; continued
B) benefits; exceed; costs; discontinued
C) costs; are less than; benefits; continued.
D) benefits; equal; costs; discontinued

Explanation / Answer

1 A) bisect any horizontal line drawn between the vertical axis and the demand curve. 2 A) increase; decrease 3 C) are determined by the vertical distance between price and average total cost. 4 B) resource allocation will improve. 5 B) equal; exceed 6 C) costs; are less than; benefits; continued.

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