Question

1. If a single-price monopoly wants to sell a great quantity of output it must..

a. raise its price

b. simply produce more and sell it at the same price

c. lower its price

d. tell consumers to buy more because it's a monopolist

2. As output increases, marginal revenue...

a. increases for a perfectly competitive firm

b. is constant for a monopolistically competitive firm

c. increases for a monopoly

d. decreases for a perfectly competitive firm

e. decreases for a monopoly

3. Price setting ability is ONLY possible for a firm in...

a. perfect competition

b. monopoly

c. monopoly and oligopoly

d. monopoly, oligopoly, and monopolistic competition

e. all market structures

4. Barriers to entry ONLY exist in...

a. perfect competition and monopolistic competition

b. monopoly and oligopoly

c. oligopoly and monopolistic competition

d. monopoly, oligopoly, and monopolistic competition

e. all market structures

5. Market failures are ONLY possible in..

a. perfect competition

b. monopoly

c. monopoly and oligopoly

d. monopoly, oligopoly, and monopolistic competition

e. all market structures

Answer 1

1> c. lower its price

Since monopoly has a negatively sloped demand line, it must lower its price to sell more.

2> e. decreases for a monopoly

For a monopoly, the marginal revenue is downward sloping.

3> d. monopoly, oligopoly, and monopolistic competition

In perfect competition, they do not have price setting power, but in the other market structure mentioned, they have certain market power.

4> b. monopoly and oligopoly

In monopoly and oligopoly barriers to entry exist.

5> e. all market structures

For a public good, neither of this market structure is good and it leads to failure.