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ECON 201 Final Study Guide Questions and Answers 100% Pass

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ECON 201 Final Study Guide Questions and Answers 100% Pass The marginal revenue curve of a monopolist lies below the demand curve because: a. the marginal revenue curve coincides w/ the average revenue curve b. the monopolist is a price taker c. the monopolist must lower price on all units sol...

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  • January 10, 2025
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  • 2024/2025
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  • Questions & answers
  • ECON 201
  • ECON 201
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EmilyCharlene
ECON 201 Final Study Guide
Questions and Answers 100% Pass

The marginal revenue curve of a monopolist lies below the demand curve because:


a. the marginal revenue curve coincides w/ the average revenue curve


b. the monopolist is a price taker


c. the monopolist must lower price on all units sold in order to sell additional units


d. the demand curve is unit elastic - ✔✔c. the monopolist must lower price on all units

sold in order to sell additional units


A monopolist:


a. can choose any price along the market curve


b. takes the price of its product as given and produces as much output as possible


c. chooses the price of its product so as to maximize the number of sales


d. can choose any price it wants, regardless of demand. - ✔✔a. can choose any price

along the market curve


The market demand curve and the demand curve faced by a monopoly are:




EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1

,a. different, but we can't tell which is more elastic w/o more information


b. different in that the market demand curve is less elastic


c. different in that the market demand curve is more elastic


d. identical - ✔✔d. identical


If the monopolist is operating in the elastic portion of its demand curve, then


a. an increase in price will decrease total revenues


b. an increase in price will leave total revenue unchanged


c. marginal revenue is negative


d. an increase in price will increase total revenues - ✔✔a. an increase in price will

decrease total revenues


Assume that Bost, Incorporated sells game cartridges that can be used in a popular

home video system. Bost currently sells 300 cartridges per week and earns $500 in

profit. Bost's production manager calculates that the marginal cost of the next unit is $5,

while marginal revenue for one additional unit is $10. Based upon this info we would

conclude that:


a. Insufficient information


b. Bost should reduce their output


c. Bost's profit would rise to $505 by increasing output 1 unit




EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2

, d. Bost's profit would rise to $510 by increasing output 1 unit - ✔✔c. Bost's profit would

rise to $505 by increasing output 1 unit


Generally, we expect monopolies to (blank) output when demand for their product

rises.


Select one:


a. double


b. not change


c. decrease


d. increase - ✔✔d. increase


Compared to a competitive industry, ceteris paribus, a monopoly


Select one:


a. restricts output and charges a higher price


b. sells the same amount of units but at a higher price


c. sells more units and charges a higher price


d. does not try to maximize profits as do firms in competitive industries - ✔✔a. restricts

output and charges a higher price


Consider a monopolist that is currently maximizing profit by producing 10 units. Which

of the following statements is not true?




EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3

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