True or false? Monopolies charge a mark-up over marginal cost because they face a perfectly...
Question:
True or false? Monopolies charge a mark-up over marginal cost because they face a perfectly elastic supply curve.
Marginal cost:
Marginal cost refers to a change in the additional unit of cost of the services and goods in the firm. It includes a decrease and increase of the incremental cost of the company. It is calculated for the production and material costs.
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View this answerThe correct answer is True
The above-given statement is true because the monopolies can affect the marginal cost due to the elastic supply curve. A...
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Marginal Cost: Definition, Equation & Formula
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Chapter 3 / Lesson 12
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What is marginal cost? Learn how to calculate marginal cost with the marginal cost formula. See the definition, behavior, and marginal cost examples.
Related to this Question
- True or false? For natural monopolies, marginal cost is always below average variable cost.
- True or false? A monopolist is constrained by marginal cost in setting its price.
- A monopolist's marginal cost is less than the price it charges. A) True B) False
- True or false? A competitive firm's supply curve is identical to its marginal cost curve.
- True or false? Marginal revenue is less than price for monopolies and monopolistically competitive firms.
- State true or false. Since a monopolist is a price taker, it cannot have a supply curve.
- True or False: A monopoly's supply curve is the portion of its marginal cost curve that lies above its average variable cost curve.
- True or false? A monopolistic firm's demand curve is less elastic than a purely competitive firm's demand curve.
- A monopolist always sets price equal to the unitary elastic point on its demand curve.? a. True b. False, Use a graph.
- True or false? A monopolistic firm's demand curve is always inelastic.
- Price-discriminating, profit-maximizing monopolists charge higher prices to buyers who have more elastic demand curves. a. True b. False
- A monopoly's marginal cost curve is the monopoly's supply curve. True or false? Explain your answer.
- True or false? If there are no fixed costs and the marginal costs are strictly increasing, then the average cost curve is always below the marginal cost curve.
- Answer true or false: The monopolistic competitive firm faces a perfectly elastic demand curve.
- True or false? Firms with market power price above marginal cost.
- True or false? A monopolist produces on the inelastic portion of its demand curve.
- True/False: Under monopoly, relative markups are higher when demand elasticity is lower.
- True or False: A monopolist sells to two markets: Market 1: there is a constant elasticity of demand e1<-1 Market 2: there is a constant elasticity of demand e2>-1. The monopolist charges a higher pr
- True or False: In competitive markets, price exceeds marginal cost; in monopolized markets, price equals marginal cost.
- The ratio of price to marginal cost for a monopolist increases as the demand curve becomes more elastic. True or False? Explain
- True or false? A decrease in the price elasticity of demand would follow an increase in monopoly power.
- In monopolistic competition, firms equate price and marginal cost. Is this statement true or false? Explain.
- True or false? A monopoly is a market structure in which the firms face a perfectly elastic demand curve.
- Consider the following statement: "A monopolist always sets price equal to the unitary elastic point on its demand curve." Is the statement true or false?
- In monopoly, firms equate price and marginal cost. Is this statement true or false? Explain.
- A monopolist never produces on the elastic portion of his demand curve. a. True b. False
- True or false? If a monopoly is maximizing profits, the price will always be greater than the marginal cost.
- True or false? For natural monopolies, the average variable cost is always increasing.
- True or false? A monopolist is constrained by demand in setting its price.
- True or False: Consider a monopolist that produces two interrelated goods A and B with Q_A(P_A, P_B) and Q_B (P_A, P_B) where Q is the demand and P is the price. If \frac{dQ_A]{dQ_B}= 0, the firm could charge the same price as a monopolist in market A whi
- State True or False and justify your answer: A monopoly with a more elastic demand curve will have more market power.
- True or false? The price a profit-maximizing monopoly charges is always greater than its marginal cost as well as its MR while it may not be greater than its ATC.
- The ratio of a monopolist's optimal price to its marginal cost is larger when the market elasticity of demand is greater in absolute value (i.e., more elastic). a. True. b. False.
- A monopolist picks the quantity of output at which price equals marginal cost. A) True B) False
- True or false? A price-discriminating pure monopoly will follow a system where buyers with relatively more inelastic demands are charged higher prices than buyers with relatively more elastic demands.
- A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces. a. True b. False
- True or false? A price-discriminating pure monopoly will follow a system where all buyers are charged the same price regardless of their elasticity of demand.
- A decrease in the price elasticity of demand would follow an increase in monopoly power. True or false?
- Answer true or false: A monopolist's marginal revenue is 0 whenever the price elasticity of demand is -1.
- True or false? A monopoly firm will maximize profit by producing where demand is inelastic.
- A monopolist will always want to produce in the more elastic segment of its demand curve. a. True. b. False.
- If a price ceiling is imposed in a natural monopoly market and the price ceiling is below marginal cost of the monopolist, then the monopolist will not produce any units for sale in the long run. a. True. b. False.
- True or false? Equilibrium in a monopolized market is efficient because the monopolist always produces where marginal cost equals marginal revenue.
- True or false? Monopolies earn positive economic profits because they sell unique products with inelastic demand.
- True or false? The invisible hand leads to firms charging a price that is equal to marginal cost in both competitive and non-competitive markets.
- In a natural monopoly, if the government requires marginal cost pricing, it must pay the monopolist a subsidy. a. True b. False
- True or false: If a price ceiling is imposed in a natural monopoly market and the price ceiling is above marginal cost and average cost of the monopolist, and below the price the monopolist would choo
- True or false? A pure monopolistic demand curve is the industry demand curve.
- True or false? The biggest problem with monopolies is they charge higher prices, so fewer consumers can afford the product.
- A monopolist will always pick a price in the elastic region of the demand curve. a. True b. False
- True or false: A monopolist produces an efficient quantity of output but it is still inefficient because it charges a price that exceeds marginal cost and the resulting profit is a social cost. True
- True or False: If the marginal cost curve is increasing, the average cost curve must be increasing, as well.
- A monopolist will always charge a higher price than a purely competitive industry. (a) True (b) False.
- State True or False and justify your answer: In the case of a natural monopoly (i.e. a firm whose average cost decreases as output increases due to large fixed and low marginal costs), the government should generally regulate the monopolist to charge a pr
- If marginal costs always increase as output increases, then the average fixed cost curve will be U-shaped. True ; False.
- TRUE or FALSE: A firm's labor supply curve is identical to its marginal factor cost curve.
- The marginal revenue curve for a monopolist is always less than the price because of the price effect. a. True b. False
- In a monopolistically competitive market equilibrium, the price is equal to the marginal cost. a. True b. False
- For a competitive firm, the supply curve is that part of the average variable cost curve that is above the short-run marginal cost curve. a. True b. False
- True or false? In a market in which there is a perfectly price discriminating monopolist, there is no consumer surplus.
- True or false? The supply curve reflects the marginal cost of producing a particular quantity of a good.
- A monopolist maximizes profit by producing an output level where marginal cost equals price. a. True b. False
- State True or False and justify your answer: If a rational monopolist is confronted with a dramatic increase in its fixed costs, then this monopolist, ceteris paribus, would have a strong incentive to pass at least some of this fixed cost along to consume
- True or false? The long-run aggregate supply curve is vertical because economic forces do not affect long-run aggregate supply.
- True or False: The demand curve facing a monopolistically competitive firm is elastic. The goal of the firm's owner is to make it nearly inelastic. Explain.
- If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost, the government will likely need to subsidize the firm. a. True b. False
- True or false? Along a single demand curve, demand elasticity decreases as you move down the curve (to lower prices).
- True or false? A firm's profits go up if it charges a higher price than the market price when demand is perfectly elastic.
- True or false? A profit-maximizing monopolist has a lot of market power.
- True or False: \\ Equilibrium in monopolistically competitive markets requires that firms be operating at the minimum point on the long-run average cost curve.
- In monopoly, firms equate marginal revenue and marginal cost. Is this statement true or false? Explain.
- A monopolist who is able to practice third-degree price discrimination charges a higher price in the market that is more elastic. True or false?
- A monopolist's marginal revenue curve is flatter than its demand curve. a. True b. False
- In monopolistic competition, firms equate marginal revenue and marginal cost. Is this statement true or false? Explain.
- A monopolist selling an elastic good will set a lower price than a monopolist selling an inelastic good. True or false?
- True or false? The marginal product curve rises when the marginal cost curve rises.
- True or false? Ceteris paribus, the more elastic the supply curve, the larger the total subsidy.
- True or False: If a price ceiling is imposed in a natural monopoly market and the price ceiling is below average total cost of the monopolist and below the price the monopolist would choose to charge if unregulated, then the monopolist will not produce an
- Determine whether the following statement is true or false: A monopolist will always want to produce in the more elastic segment of its demand curve.
- Since a perfectly competitive firm has no market power, its marginal cost curve is flat (horizontal). True or False?
- True or false? Unlike the perfect competitor, who is a price taker, the monopolist is faced with a demand curve such that he/she can charge whatever price he/she wishes.
- If the price elasticity of supply is equal to zero, then supply is perfectly inelastic. a. True. b. False.
- If a monopolist is able to price discriminate, it will also be the case that marginal cost is different in each market. Is this statement true or false? Explain.
- State True or False and justify your answer: A monopolist can earn positive profits in the long run because it has market power, allowing it to charge a price that is higher than the marginal cost.
- True or false? From the point of view of economic efficiency, a monopolist produces too little of a good and charges too high a price.
- Cost-plus regulation allows natural monopolies to earn zero economic profit. True False
- The price a monopolist charges may or may not be above its average cost, but it is always above its MR. A) True B) False
- True or false? In the long run, a monopolistic competitor produces at a quantity where marginal revenue equals marginal cost.
- True or false? In a competitive industry, the price elasticity of the aggregate industry supply curve will always be greater than or equal to the price elasticity of the supply of any individual firm.
- In the monopolistic competition model, the firm's demand curve is a horizontal line. True or false?
- A monopolist produces an output level where marginal revenue equals marginal cost and charges a price where marginal cost equals average total cost. a. True b. False
- In the case of a monopoly, the firm maximizes profits at a point where the marginal revenue significantly exceeds the marginal cost. A. true B. false
- With respect to the kinked demand curve, price is greater than marginal costs. True False
- True or false? In the long run, monopolistically competitive firms charge consumers higher prices than monopoly firms.
- (1) True or false: the marginal cost curve crosses the total cost curve at its minimum point. Plot the relevant cost curves to explain your answer. (2) True or false: the long-run marginal cost curve is always above any short-run marginal cost curve, beca
- Compared to the situation in a competitive market, in a monopolistic market, firms generally do not produce less output, while charging higher prices. True False
- True or False: When a monopolist practices price discrimination, the monopolist's profits will be lower than in a single-price monopoly.
- Similar to monopoly, Monopolistically Competitive firms face down-sloping demand curve. a. True b. False
- The price elasticity of supply tends to become more elastic in the long run. a. True. b. False.
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