Try out our new practice tests completely free!

# Microeconomics Study Set 30

Bookmark

## Quiz 14 : Monopoly and Monopolistic Competition

Significant barriers to entry exist in a monopolistically competitive industry.
Free
True False

False

Monopoly is a market structure in which:
Free
Multiple Choice

A

A monopolistically competitive firm faces a downward-sloping demand curve.
Free
True False

True

A market structure in which one firm makes up the entire market is:
Multiple Choice
If a monopolist increases output from 14 to 15 by lowering its price from $32 to$31, marginal revenue is:
Multiple Choice
The profit-maximizing output level for a monopolist occurs where marginal revenue equals marginal cost.
True False
When a monopolistically competitive firm is in long-run equilibrium, average total cost is at its minimum.
True False
For a monopolist, the point where the marginal revenue curve intersects the horizontal axis is:
Multiple Choice
A profit-maximizing monopolist will always set price equal to marginal cost.
True False
A price-discriminating monopolist will make less in profit than will one that does not price-discriminate.
True False
Since marginal revenue is less than price for a monopolist, a monopolist maximizes profits by equating marginal revenue and marginal cost, not price and marginal cost.
True False
Monopolies that exist because economies of scale create a barrier to entry are called natural monopolies.
True False
If a monopolist can price discriminate among buyers, it will charge buyers with more elastic demands a higher price.
True False
A monopoly firm is different from a competitive firm in that:
Multiple Choice
Under normal monopoly, P > MC, and so the marginal benefit to society of increasing output exceeds the marginal cost. This means that an increase in output will increase welfare.
True False
A monopolistically competitive industry has many firms that sell differentiated products.
True False