Which of the following statements about the firm depicted in the diagram is true? O A. The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises. O B. The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximizes its profits. OC. The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises. O D. The fact that this firm is a natural monopoly is shown by the long-run average total cost curve still falling when it crosses the demand curve. Price and cost per unit 395 70 59 20 109 1,740 1,900 2,204 MC Demand ATC Quantity

Which of the following statements about the firm depicted in the diagram is true? O A. The fact that this firm is a natural monopoly is shown by the continually declining market demand curve as output rises. O B. The fact that this firm is a natural monopoly is shown by the fact that marginal cost lies below the long-run average total cost where the firm maximizes its profits. OC. The fact that this firm is a natural monopoly is shown by the continually declining marginal revenue curve as output rises. O D. The fact that this firm is a natural monopoly is shown by the long-run average total cost curve still falling when it crosses the demand curve. Price and cost per unit 395 70 59 20 109 1,740 1,900 2,204 MC Demand ATC Quantity

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 3SCQ: Suppose the local electrical utility, a legal monopoly based on economies of scale, was split into...

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Suppose the local electrical utility, a legal monopoly based on economies of scale, was split into four films of equal size, with the idea that eliminating the monopoly would promote competitive pricing of electricity. What do you anticipate would happen to prices?
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QUESTION 10 For a monopoly firm: O A. total revenue is a straight, O B. the marginal revenue curve lies O C. the marginal revenue curve lies O D. the marginal revenue curve lies upsloping line because a firm's sales are independent of product price above the demand curve because any below the demand curve because below the demand curve because reduction in price applies to all units any reduction in price applies to any reduction in price applies only to the extra unit sold sold all units sold
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The figure to the right shows the average cost of production (AC) for a cable company that is a monopoly as well as the corresponding demand (D) for cable subscriptions in the city to which the company provides service. Is this company a natural monopoly? This firm O A. is a natural monopoly because average cost is decreasing when it crosses demand. B. is not a natural monopoly because its demand is downward sloping. C. is a natural monopoly because total cost does not always increase with output. O D. is a natural monopoly because it has excess capacity. O E. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80- 76- 72- 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D AC 5 6 8 9 Quantity (cable subscriptions in 1000s) Ⓡ 10
a. Please complete the following sentence. One difference between a monopoly and a perfectly competitive firm is that a. only a monopoly faces a downward sloping demand curve. O b. only a perfectly competitive firm produces its optimal level of output by setting marginal revenue equal to marginal cost. O c. O d. O e. b. only a perfectly competitive firm faces a downward sloping demand curve. only a monopoly produces its optimal level of output by setting marginal revenue equal to marginal cost. only a monopoly is a price taker. Please complete the following statement. When isoquants are convex O a. O b. C. the marginal rate of technical substitution rises as the quantity of labour increases. none of the other options. O c. labor, but not capital, is subject to the law of diminishing marginal returns. O d. the marginal rate of technical substitution falls as the quantity of labour increases. O e. as labour increases and capital decreases, both the marginal product of capital and labour…
Which of the following statements regarding a profit-maximising monopolist is FALSE? O a. This firm might respond to a fall in demand by reducing both its output and its price. O b. This firm might respond to a fall in demand by reducing its output and increasing its price. O c. This firm would respond to a fall in the price of a variable input by increasing its output and reducing its price. d. This firm would respond to a fall in the price of a fixed input by increasing its output and reducing its price.
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Which of the following markets is susceptible to being a natural monopoly? (Select all that apply?) O a. Electricity transmission b. Vaccine production C. Music production d. Sewage management O e. Airport Of. Computer production A Moving to another question will save this response. O O 0 0