Which of the following did Queen Elizabeth of England create in 1600 by granting a charter to the East India Company, bestowing exclusive trading rights in India?
| a. | An (old-fashioned) technological innovation | b. | A price-discriminating monopoly |
|---|---|---|---|
| c. | A legal barrier to entry | d. | A natural barrier to entry |
The single-price monopolist sets price at which of the following points?
| a. | At the point where demand equal marginal cost | b. | At the point on the demand curve directly above the point where MC = MR |
|---|---|---|---|
| c. | At the same point as a perfectly competitive firm | d. | At the point where marginal cost equal average total cost |
Which of the following is the production point for a simple monopolist who is incurring a loss?
| a. | MC = MR | b. | MR = ATC |
|---|---|---|---|
| c. | ATC = P | d. | MC = P |
Which of the following is equal to the price a single-price monopoly receives from selling an extra unit of output, minus any revenue lost if the price reduced on all other units sold?
| a. | Net revenue | b. | Marginal revenue |
|---|---|---|---|
| c. | Marginal profit | d. | Total revenue |
What is a single-price monopoly’s total economic profit at eleven units if it makes $10 per unit profit when it produces ten units of output, where the marginal revenue of the eleventh unit is $55 and the marginal cost is $60?
| a. | $75 | b. | $85 |
|---|---|---|---|
| c. | $80 | d. |
$95 |
If a single-price monopolist is currently maximizing profits, what can be concluded?
| a. | She is producing where marginal revenue equals average cost. | b. | She has reduced the difference between marginal revenue and marginal cost to zero. |
|---|---|---|---|
| c. | She is maximizing total revenue and marginal revenue. | d. | She is maximizing total revenue and minimizing total cost. |
How would you define limit pricing?
| a. | Pricing the product to limit losses | b. | Pricing on the basis of current trade policy |
|---|---|---|---|
| c. | Pricing each unit differently | d. | Pricing below short-run profit maximum level |
A monopolist’s rent-seeking activity does not involve the cost of hiring _________.
| a. | corporate lawyers | b. | labor union |
|---|---|---|---|
| c. | lobbyists | d. | researchers |
Which of the following is a reason why a closed monopoly experiences high costs and inefficiency?
| a. | It sells an inferior good. | b. | It is unable to secure sufficient resources. |
|---|---|---|---|
| c. | It pays too much for labor. | d. | It has the additional costs of rent seeking. |
1. Which of the following did Queen Elizabeth of England create in 1600 by granting a charter to the East India Company, bestowing exclusive trading rights in India?
Ans:- b) a price dicriminating monopoly
Explanation:- The royal charter granted by Queen Elizabeth which gave exclusive trading rights to East India company and it was granted in a hope to break duch monopoly. As a result of this, the company started to set up trading establishments on the west and east cost of India and Bengal.
2. The single-price monopolist sets price at which of the following points?
Ans :- c) at the same point as perfectly competitive firm
Explanation:- Similar to perfect competition, in single price monopoly, monopolists try to find the price and output quanitity at point where MR is equal to MC to maximise profit, where MR is Marginal revenue and MC is marginal cost.
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