A monopolist has market power because it faces a downward-sloping demand curve.
Answer the following statement true (T) or false (F)
True
In monopoly situations, the demand curve facing the firm is identical to the market demand curve for the product and therefore is downward-sloping. A firm that faces a downward-sloping demand curve can control price by altering output.
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Use the following table to answer the question below.(1)(2)(3)(4)(5)QdQdPriceQsQs5040$1070806050960708060850609070740501008063040Suppose that market demand is represented by two demanders in columns (1) and (2) and market supply is represented by two suppliers in columns (4) and (5). If the price were artificially set at $9
A. a surplus of 20 units would occur. B. demand would change from columns (3) and (2) to columns (3) and (1). C. the market would clear. D. a shortage of 20 units would occur.
A monopolist can maximize profits by:
A. selling as much as he can produce. B. producing at the level of output at which MR = 0. C. following the same rules as a perfectly competitive firm. D. selling an output where P = ATC.
A "war on drugs" is waged, and, as a result, a larger quantity of drugs flowing into the United States is seized and more drug traffickers are arrested. If demand for drugs is relatively elastic, one would expect the total expenditure on drugs to: a. decrease
b. increase. c. stay constant. d. There is not enough information available to make a determination.
An increase in demand coupled with a decrease in supply results in a(n)
a. increase in equilibrium price and an ambiguous effect on equilibrium quantity b. increase in equilibrium quantity and a decrease in equilibrium price c. decrease in equilibrium quantity and an ambiguous effect on equilibrium price d. surplus e. decrease in the equilibrium price and quantity