1 A monopoly is a firm that produces
a equilibrium in the industry
bThe smallest amount of output in the industry
c Competition in the industry
d all the output in the industry
2 The profit-maximizing firm will be earning total revenue of
PLEASE SEE THE PICTURE FOR QUESTION 2
Multiple Choice
OFIN.
OFJM.
OFKL.
OGHM
3
If a monopolist’s marginal cost equals its marginal revenue
Multiple Choice
output should be raised.
output should be reduced.
production is at its most efficient level.
profits are maximized or losses are minimized.
4
Government licensing, patents, and government franchising are all examples of
Multiple Choice
economies of scale.
economies of being established.
legal barriers to entry.
control of an essential resource.
5
There are only two justifications for monopoly: _____ and _____.
Multiple Choice
economies of scale; natural monopolies
economies of scale; patents
natural monopolies; patents
imperfect competition; being established
6
Output Price
1 $20
2 18
3 16
4 14
5 12
The marginal revenue that would be derived from production of the second unit would be
Multiple Choice
$20.
$18.
$16.
$14.
