Question

5. The marginal revenue curve for a monopolist is greater than the price because the monopolist...

5. The marginal revenue curve for a monopolist is greater than the price because the monopolist faces a downward sloping demand curve for its product. True or False?

8. In a competitive industry, barriers to entry prevent new suppliers from entering the market. True or False?

9. Economies of scale occur when the long-run average cost curve slopes downward. True or False?

11. If a market changes from perfectly competitive to monopolistic, output will increase and the price will decrease, ceteris paribus. True or False?

16. For a monopoly, profits are maximized at the output level where price and marginal cost are equal. True or False?

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Answer #1

5. False

Explanation: because monopolist must lower the price on all the units in order to sell additional units, the marginal revenue will be less than the price.

8. False

Explanation: in a perfectly competitive industry, there are no restrictions to entry thus there is free entry and exit of firms under perfect competition.

9.true

Explanation : there are economies of scale if long run average cost curve slopes downward and there are dis economies of scale if long run average cost curve slope upwards.

11. False

Explanation: if a competitive market changes to monopoly, there is decrease in quantity and increase in price criteris paribus.

16. False

Explanation: in case of monopoly profits are maximised where marginal revenue is equal to marginal costs.

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