1. The practice of price discrimination is associated with puremonopoly because:

a, it can be practiced whenever a firm's demand curve isdownsloping.

b, monopolists have considerable ability to control output andprice.

c, monopolists usually realize economies of scale.

d, most monopolists sell differentiated products.

2. At its profit-maximizing output, a pure nondiscriminatingmonopolist achieves:

a, neither productive efficiency nor allocative efficiency.

b, both productive efficiency and allocative efficiency.

c, productive efficiency but not allocative efficiency.

d, allocative efficiency but not productive efficiency.

3. Because the monopolist's demand curve is downsloping:

a, MR will equal price.

b, price must be lowered to sell more output.

c, the elasticity coefficient will increase as price islowered.

d, its supply curve will also be downsloping.

4, If a regulatory commission wants to provide a naturalmonopoly with a fair return, it should establish a price that isequal to:

a, minimum average fixed cost.

b, average total cost.

c, marginal cost.

d, marginal revenue.

5, Refer to the diagram. If this industry is purelymonopolistic, the profit-maximizing price and quantity will be:

a, P₃ and Q₃.

b, P₁ and Q₁.

c, P₂ and Q₂.

d, indeterminate on the basis of the information given.

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Answer isB Because monopolist is the only one in the assiduity so it has considerable control on ... View the full answer