1. A monopoly may produce more efficiency than the same industry in competitive firm because

A. A monopoly can concentrate on a production rather than profits

B. A monopoly does not have to worry about what its rival may do

C. Monopolies typically have better management

D. There may be economies of scale that would not be achieved by a number of small firms

2. A monopoly can incur losses

A. In the short run to discourage a potential competitor from entering the market or to bankrupt a new competitor

B. If demand is relatively weak and costs are relatively high

C. For none of the above reason

D. Only in short run

E. For all of the above reasos

3. If the price is less than the average total cost for a perfectly competitive firm in the short run, then the firm

A. Should shutdown

B. Should continue to operate as long as price is above the average variable cost

C. Is breaking even

D. Should continue to operate as long as price is above the average fixed cost

E. Is earning an economic profit