Which of the following is true of marginal revenue for a monopolist that charges a single price?

P > MR because the monopolist must decrease price on all units sold in order to sell an additional unit

If all of a monopolist's costs are fixed costs, it will produce where marginal revenue is zero.

true

A monopolist earning short-run economic profit determines that at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?

Raise price and lower output.

Which of the following is not true of a pure monopoly?

It is a price taker

A monopolist has no supply curve because

as demand changes, each output level can be consistent with more than one profit-maximizing price

Gilligan runs the only dry-cleaning business on a desert isle. If the cost of cleaning fluid falls, he can increase profit by

lowering price

In the short run, a monopolist will always shut down when

total variable cost is greater than total revenue at all output levels

Which of the following statements is true of a monopolist?

The firm might earn a profit in the long run.

What is true at the profit-maximizing quantity for a nondiscriminating monopolist but not true of a perfectly competitive firm?

Price is greater than marginal cost.

A profit-maximizing monopolist produces an output level that is allocatively inefficient because

price is greater than marginal cost

Which of the following prevents potential competitors from entering a monopolist's market?

legal restrictions

Natural monopolies form when

long-run average cost declines as a firm expands output

The demand curve faced by a firm with a patent on a marketable product

slopes downward

As a monopolist increases the quantity of output produced, what happens to price (P) and marginal revenue (MR)?

both P and MR decrease, but MR falls faster than P

For a nondiscriminating monopolist, describe the relationship between market price (P), average revenue (AR), and marginal revenue (MR).

P = AR > MR

Which of the following is true at the profit-maximizing quantity for both a perfectly competitive firm and a monopoly?

Marginal revenue equals marginal cost

In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly increases? It will

restrict output to extract a higher price from customers

Suppose Arf n' Barf restaurant has a monopoly on restaurant food in a certain small town. Their rent, which is one of several fixed costs they pay whether they sell food or not, has gone up. In the short run, the Arf n' Barf should

pay the higher rent and leave menu prices unchanged

A monopolist's short-run supply curve is

nonexistent

Which of the following falsely describes a nondiscriminating monopolist at profit maximization?

Economic profit is always positive.

Which of the following is true in both perfect competition and monopoly?

Firms go out of business in the long run if total revenue cannot cover total cost.

If the government breaks up a constant-cost, nondiscriminating monopoly into a perfectly competitive industry, what would we expect with regard to output and price?

Output will increase and price will decrease.

Firms may easily enter a monopolistically competitive market.

true

The demand curve facing Imelda's Shoe Boutique, a monopolistically competitive firm,

slopes downward because Imelda's sells a differentiated product

Monopolistic competition is different from perfect competition because monopolistic competitors produce

differentiated products

Assume a monopolistically competitive firm is earning an economic profit. The marginal revenue from selling an additional unit is $30 and the marginal cost of producing that additional unit is $23. The firm should

reduce its price and increase its output level

In the long run, the economic profit of Hoot's Pump Chicken 'n' Ribs, a monopolistic competitor,

is eliminated because of new firms entering the industry

A rise in demand for restaurant meals is likely to cause which of the following in the short run?

economic profit for restaurants

If a monopolistically competitive firm is in long-run equilibrium and average cost equals $150, then the market price must be $150.

true

Although both perfectly competitive and monopolistically competitive firms earn normal profits in the long run, monopolistically competitive firms will not

operate where price equals marginal cost

Monopolistic competition is similar to

pure monopoly, in that firms face downward-sloping demand curves, and similar to perfect competition, in that long-run economic profit is zero

An oligopoly is characterized by

few firms, which have control over market price

It is harder to explain the behavior of firms in oligopoly than in other market structures because in oligopoly

firms base their decisions on what their rivals do

If a firm must produce a significant share of market output before low average costs can be achieved, the structure of this industry will tend to be

oligopoly

A brand name may contribute to oligopolists' economic profit by

acting as a barrier to entry

A cartel's marginal cost curve is the

horizontal sum of all the individual firms' marginal cost curves

A cartel is

a group of oligopolistic firms that engage in formal collusion

Tacit collusion occurs in industries that

contain price leaders

If oligopolists engaged in some sort of collusion, industry output would be __________ and the price would be __________ than under perfect competition.

smaller, higher