Question : 31) Monopoly allocatively inefficient because A) the price exceeds the marginal : 1384261

31) Monopoly is allocatively inefficient because

A) the price exceeds the marginal cost of the last unit produced.

B) the opportunity cost exceeds the marginal cost of the last unit produced.

C) the marginal cost exceeds the average cost for the last unit produced.

D) lower costs could be achieved.

E) the firm has no incentive to maximize profits.

32) Consider the efficiency of various market structures. In the absence of other market failures, allocative efficiency is achieved only under perfect competition because only this market structure results in

A) zero long-run profits.

B) P = MC.

C) complete freedom of entry and exit.

D) maximization of profits through competition.

E) productive efficiency.

33) If a perfectly competitive industry was suddenly monopolized without any change in cost conditions,

A) both price and quantity produced would increase.

B) both price and quantity produced would decrease.

C) price would increase and quantity produced would decrease.

D) price would decrease and quantity produced would increase.

E) there would be no change in either price or quantity produced.

34) In principle, a comparison of the long-run equilibrium of competitive and (single-price) monopoly industries leads to the following conclusion:

A) both the competitive industry and the monopoly will allocate resources efficiently.

B) the competitive industry is consistent with allocative efficiency whereas the monopoly is not.

C) neither industry is capable of allocative efficiency.

D) the competitive industry will achieve productive efficiency but the monopoly will not.

E) both the competitive industry and the monopoly will allocate resources inefficiently.

35) Refer to Figure 12-3. If the diagram is depicting a perfectly competitive industry, the equilibrium price and quantity is

A) P1 and q1.

B) P1 and q2.

C) P2 and q1.

D) P2 and q2.

E) P3 and q1.

36) Refer to Figure 12-3. If the diagram is depicting the market situation for a monopoly, the equilibrium price and quantity are

A) P1 and q1.

B) P1 and q2.

C) P2 and q1.

D) P2 and q2.

E) P3 and q1.

37) When comparing a perfectly competitive firm and a (single-price) monopolist, a major difference is that

A) the monopolist produces where MR = MC, but the perfect competitor does not.

B) the perfect competitor achieves productive efficiency, but the monopolist does not.

C) the perfect competitor produces where P = MC, but the monopolist does not.

D) the monopolist achieves allocative efficiency but the perfect competitor does not.

E) the perfect competitor minimizes its costs, but the monopolist does not.

38) Choose the statement that best compares the long-run equilibrium of a competitive industry with that in a monopolized industry (with a single price).

A) Resources will be allocated efficiently in both the competitive and monopolized industries.

B) Allocative efficiency will be achieved in the competitive, but not the monopolized industry.

C) Allocative efficiency is not possible in either industry.

D) Allocative efficiency will be achieved in the monopolized, but not the competitive industry.

E) It is not possible to make this comparison because firms in a competitive industry operate only in the short run.

39) In the absence of other market failures, allocative efficiency is achieved in a perfectly competitive industry because

A) firms do not need to maximize profits.

B) the industry produces a level of output such that the marginal cost of production is minimized.

C) the industry produces a level of output such that there are increasing returns to scale.

D) there are barriers to entry.

E) the industry produces a level of output such that the marginal cost to producers equals the marginal benefit to consumers.

40) Refer to Figure 12-4. What is the total revenue received by the sellers of this product at the allocatively efficient level of output?

A) $5

B) $125

C) $250

D) $375

E) $500