Why can a monopoly keep earning economic profits in the long run?
Correct answer C. There is some barrier to entry to that market
Subject / 2,616 questions
Economics MCQs
Page 18 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 18 of 131
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
Which of these is a feature of pure monopoly?
Correct answer B. One seller of the product
To maximise profits, what quantity does a monopoly firm produce?
Correct answer D. Marginal revenue equals marginal cost
Advertisement
What is necessary for a natural monopoly to exist?
Correct answer D. All of the above
What is needed for a firm to practise price discrimination?
Correct answer D. All of the above
Under price discrimination, which part of the market is charged the higher price?
Correct answer D. The section with the most inelastic demand
How is the marginal revenue curve positioned under monopoly?
Correct answer B. Lies below and diverges from the demand curve
What is true of a monopoly in long-run equilibrium?
Correct answer B. The firm is allocatively inefficient
Which statement is NOT true of a monopoly?
Correct answer D. There is freedom of entry and exit into the industry in the long run
Advertisement
What did Joseph Schumpeter argue about monopolies?
Correct answer C. Monopoly profits act as an incentive for innovation
How does the UK government deal with monopolies?
Correct answer A. Has the right to investigate monopolies and will assess each one on its own merits
What is a firm called whose average total cost keeps falling at least up to the output needed to supply the whole market?
Correct answer D. Natural monopoly
At which output level does a monopolist maximise profit?
Correct answer D. Marginal revenue equals marginal cost
Compared with a perfectly competitive market, what does a monopoly market usually produce?
Correct answer D. Higher prices and lower output
What happens if government regulation forces a natural monopoly to set its price equal to marginal cost?
Correct answer D. It causes the monopolist to exit the market
Advertisement
What tends to be true of public ownership of natural monopolies?
Correct answer B. Tends to be inefficient
If regulators split a natural monopoly into many smaller firms, what happens to the cost of production?
Correct answer C. Will rise
If marginal revenue is greater than marginal cost, what should a monopolist do?
Correct answer B. Increase output
Under pure monopoly, how do price and marginal revenue compare?
Correct answer A. The price is greater than the marginal revenue
Compared with perfect competition, what is a monopolist more likely to do?
Correct answer D. All of the above