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True or False Quiz
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1
A monopolist is free to charge any price it wishes for its product.
A)True
B)False
2
A patent is an example of a barrier to entry.
A)True
B)False
3
At any given output the marginal revenue of the monopolist may be equal to, greater than, or less than its average revenue.
A)True
B)False
4
A natural monopoly exists when a single producer is able to produce at a lower cost than competing firms could.
A)True
B)False
5
At the profit-maximizing output of the monopolist, the price will be equal to the marginal cost.
A)True
B)False
6
A monopolist will only be able to make a profit if, at some output level, the average revenue exceeds the average cost.
A)True
B)False
7
A lump-sum profit tax imposed on a monopolist will cause the monopolist to increase the price and reduce output in order to maximize its profits.
A)True
B)False
8
A fair-return price is a price set equal to a firm’s lowest average cost.
A)True
B)False
9
A socially optimum price is a price set equal to a firm’s marginal cost.
A)True
B)False
10
A monopolist will break even if it is producing an output at which the average revenue is equal to the average cost.
A)True
B)False





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