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| 1 | |
All, except one, of the following statements regarding the profit-maximizing output of the monopolist are correct. Which one is false? |
| | A) | At that output, marginal cost will be equal to price. |
| | B) | At that output, marginal profit is zero. |
| | C) | At that output, the difference between total revenue and total cost will be at a maximum. |
| | D) | At that output, marginal cost will equal marginal revenue. |
| | E) | At that output, average revenue will exceed marginal revenue. |
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| 2 | |
Suppose that a perfectly competitive industry is monopolized. If the costs of production remain unchanged, which of the following statements is correct? |
| | A) | Both the price and the output of the perfectly competitive industry will be higher than those of the monopoly industry. |
| | B) | Both the price and the output of the perfectly competitive industry will be lower than those of the monopoly industry. |
| | C) | The perfectly competitive price will be higher, and the output will be lower. |
| | D) | The perfectly competitive price will be lower, and the output will be higher. |
| | E) | Output and price will remain unchanged. |
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