QUESTION 1 A government-owned monopoly is more likely to: O provide a greater qu

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QUESTION 1 A government-owned monopoly is more likely to: O provide a greater quantity of output than a private one. Oprovide output at a lower price than a private one. serve public interest than maximize profit. OAll of these statements are true QUESTION 2 For a monopoly, marginal revenue for all units greater than 1 is always less than price because of the price effect. is always more than price because of the price effect. is always more than price because of the quantity effect. is always less than price because of the quantity effect. QUESTION 3 If a monopolistically competitive firm's demand curve is shifting left, it will stop shifting when: firms have no incentive to enter the market. the price is equal to the firm's average total cost. the firm is earning zero economic profit. All of these statements are true. QUESTION 4 If a monopolistically competitive firm's demand curve is shifting left, it will stop shifting when: the price is equal to the firm's marginal cost. the price is equal to the firm's average total cost. the price is the same as what a perfectly competitive firm's price would be. there is no deadweight loss. QUESTION 5 If we were to compare the monopolistically competitive firm's long-run outcome to that of a perfectly competitive one, we would conclude that the monopolistically competitive firm: creates less total surplus. produces less. earns the same profits. All of these statements are true QUESTION 6 In the long run, a profit-maximizing monopolistically competitive firm sells at a price that is: equal to average total cost. O higher than marginal cost. revenue. equal to average OAll of these statements are true QUESTION 7 In the long run, firms in a monopolistically competitive market operate at: O an efficient scale. a less-than-efficient scale a more-than-efficient scale. Any of these could be true, depending on the individual firm.

Explanation / Answer

1. A government owned monopoly is more likely to Provide a greater quantity of output than a private one, Provide output at a lower price than a private one, Serve public interest than maximize profit. So all the options are correct. So option D is right.

2. For all monopoly, marginal revenue for all units greater than 1 is always less than price because of quantity effect. So the correct option is D.

3. If a monopolistically competitive firm’s demand curve is shifting left, it will stop shifting when firms have no incentive to enter the market, the price is equal to the firm's average total cost, and the firm is earning zero economic profit. So the correct option is D. All the options are correct.

4. If a monopolistically competitive firm’s demand curve is shifting left, it will stop shifting when there is no deadweight loss. So the correct is D.

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