Question 6 1 point When a pure monopolist is in equilibrium

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.

Solution

(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)