Reading 19: Monopoly
LOS a: Describe the characteristics of a monopoly, including factors that allow a monopoly to arise, and monopoly price-setting strategies 1.Which of the following statements about monopolies is most accurate? A) A monopolist's optimal production quantity is at the point where marginal revenue equals marginal cost. B) Monopolists charge the highest possible price. C) Monopolists always make a profit. D) A monopoly structure is characterized by a well-defined product for which there are no good complements. The correct answer was A) All firms maximize profits where MR = MC. Because of a downward-sloping demand curve and high barriers to entry, monopolists can charge a price higher than MC. Like other price searchers, monopolists take price from the demand curve (at the quantity where MR=MC). The other statements are false. A monopoly structure is characterized by a well-defined product for which there are no good substitutes. A monopolist will earn a profit as long as the demand curve lies above the average total cost curve (ATC) at the optimal quantity point. Monopolists want to maximize profits, not price.
 reading 19 习题.rar (61.66 KB)
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发表于 2008-1-29 20:08
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