Question : 16.2   Single-Price Monopoly 1) The demand curve for a monopoly is A) : 1241284

16.2   Single-Price Monopoly

1) The demand curve for a monopoly is

A) horizontal because the demand is perfectly elastic.

B) downward sloping.

C) vertical because the demand is perfectly inelastic.

D) upward sloping.

E) undefined because it is the only supplier in the market.

2) If a monopoly wants to sell a greater quantity of output, it must

A) lower its price.

B) raise its price.

C) tell consumers to buy more because it’s a monopolist.

D) raise its marginal cost.

E) change its fixed costs.

3) A single-price monopoly

A) must practice price discrimination.

B) can lower its price for only a few select consumers if it wants to increase its sales.

C) will set its price equal to a consumer’s willingness to pay.

D) must lower the price for all customers if it wants to increase its sales.

E) is able to raise its price as high as it wants and consumers must still buy from it because it is a monopoly.

4) Total revenue is equal to

A) the change in price resulting from a one-unit increase in quantity sold.

B) the amount people will buy at a given price.

C) the change in the quantity sold when you change the price by one unit.

D) price multiplied by the quantity sold.

E) the price at which the good or service is sold.

5) For a monopoly, marginal revenue is equal to

A) the amount people buy at a given price.

B) the amount people buy between two prices.

C) the change in total revenue brought about by a one-unit increase in quantity sold.

D) the price multiplied by the quantity sold.

E) the price of the product.

6) For a single-price monopoly, price is

A) equal to marginal revenue.

B) greater than marginal revenue.

C) less than marginal revenue because the firm must lower its price in order to sell another unit of output.

D) less than marginal revenue because the firm cannot increase its total revenue when the demand curve is downward sloping.

E) equal to zero because the firm is not a price taker.

7) Which of the following is always true for a single-price monopolist?

A) P > MR

B) P < MR C) P = MR D) P = elasticity of demand E) None of the above answers is correct because none of them is always true. 8) For a single-price monopolist, why is marginal revenue less than price? A) Because the firm is a price taker. B) To sell another unit, the price must be lowered. C) Demand is elastic when another unit is sold. D) Demand is inelastic when another unit is sold. E) The question is false because marginal revenue is always equal to price.   9) The marginal revenue for a single-price monopoly with a downward-sloping demand curve A) is less than the price. B) is greater than the price. C) is equal to the price. D) might be more than, less than, or equal to the price, depending on whether the slope of the demand curve exceeds 1.0 in magnitude. E) might be more than, less than, or equal to the price, depending on whether the price elasticity of demand exceeds 1.0 in magnitude.   10) A single-price monopoly faces a linear demand curve. If the marginal revenue for the second unit is $20, then the marginal revenue for the A) first unit is less than $20. B) third unit is less than $20. C) third unit is more than $20. D) third unit is also $20. E) more information is needed to determine if the marginal revenue for the third unit is more than, less than, or equal to $20.