Question

Which of the following statements is true? ​A firm that has monopoly power is a price...

Which of the following statements is true?

​A firm that has monopoly power is a price taker.
​A firm that has monopoly power has a perfectly inelastic demand curve.
​A firm that has monopoly power is a price maker.
​A firm that has monopoly power has a perfectly elastic demand curve.
​A firm that has monopoly power earns exorbitant profits.

Homework Answers

Answer #1

Answer- The correct answer is that MONOPOLY IS A PRICE MAKER.Monopoly is a market structure where there is only one seller selling goods or services that are not sold by any other seller and is not a price taker, a monopolist is a price maker. Also, the demand curve of monopoly is downward sloping and not perfectly elastic or perfectly inelastic. Due to the application of law of demand the demand curve is downward sloping. Also a monopolist is a sole seller of the goods and services and maximises his profits. In monopoly there are high barriers to entry.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following correctly describes how a​ firm's monopoly power would​ decrease? A. If the...
Which of the following correctly describes how a​ firm's monopoly power would​ decrease? A. If the number of firms​ increases, the​ firm's demand will become more inelastic. B. If other firms are reluctant to raise their​ price, the​ firm's demand will become more inelastic. C. If the production process includes more fixed​ inputs, the​ firm's demand will become more elastic. D. If the cost of production​ increases, the​ firm's demand will become more elastic. E. If the market demand curve...
Which of the following statements is TRUE? A. A monopoly cannot set price and quantity such...
Which of the following statements is TRUE? A. A monopoly cannot set price and quantity such that the point lies above the demand curve. B. A monopoly can charge whatever it wants. C. Profit maximization occurs by setting price first. D. Both A monopoly cannot set price and quantity such that the point lies above the demand curve and A monopoly can charge whatever it wants. I answered D, but was told it was incorrect.
Which of the following is true with respect to the demand curve for a monopolistic firm?...
Which of the following is true with respect to the demand curve for a monopolistic firm? Question 5 options: The firm's demand curve is perfectly inelastic because consumers have no other options. The firm's demand curve is equal to the market demand curve because consumers have no other options. The firm's demand curve is perfectly elastic because consumers have no other options. none of the above
Which of the following is true? Question 19 options: Under Perfect Competition and monopoly firms are...
Which of the following is true? Question 19 options: Under Perfect Competition and monopoly firms are "price makers". Under Perfect Competition firms are "price makers". Under monopoly, the firm is a "price taker" Under Perfect Competition and monopoly, firms are "price takers". Under Perfect Competition firms are "price takers". Under monopoly, the firm is a "price maker"
A monopoly: All things being equal, should never price its goods or services in the inelastic...
A monopoly: All things being equal, should never price its goods or services in the inelastic portion of the demand curve. Has an elastic demand curve Has a perfectly inelastic demand curve Faces a constant elasticity demand curve
Which of the following is true about a monopoly? Its demand curve is generally less elastic...
Which of the following is true about a monopoly? Its demand curve is generally less elastic than in more competitive markets. It will always earn economic profit. It will always produce the same as a perfectly competitive firm. If a perfectly competitive firm incurs an economic loss, it should shut down immediately. try to raise its price. shut down in the long run. shut down if this loss exceeds fixed cost. It will always be subject to government regulation. None...
1.Which of the following does not contribute to the existence of monopoly power? A)A relatively inelastic...
1.Which of the following does not contribute to the existence of monopoly power? A)A relatively inelastic market demand curve B)A pure cost or quality advantage C)A continuously decreasing long-run average cost curve D)The control of essential inputs in the production process E)The possession of a patent 2.Which of the following is true of a pure monopoly? A)A pure monopoly produces at the level where price equals marginal cost. B)A pure monopoly faces a horizontal demand curve. C)A pure monopoly is...
Which of the following statements about price elasticity of demand is correct? Select one: a. The...
Which of the following statements about price elasticity of demand is correct? Select one: a. The higher the price elasticity of demand, the steeper the demand curve. b. Inelastic demand implies that there are few close substitutes. c. Elastic demand implies a firm's high market power. d. Price elasticity of demand is equal to the slope of the demand curve. e. The higher a firm's markup, the higher the price elasticity of demand.
We describe a perfectly competitive firm as a price taker and a monopoly firm as a...
We describe a perfectly competitive firm as a price taker and a monopoly firm as a price setter. Why?
Which of the following is true of both a monopoly and a firm in a perfectly...
Which of the following is true of both a monopoly and a firm in a perfectly competitive market? a. both produce where MR=MC b. both produce where P>MR c. both make long-run profits d. both produce the same quantity of output