Question

Which of the following is true for monopoly?

Question 41 options:

The marginal revenue curve lies above the demand curve

The marginal revenue curve lies below the demand curve.

Economic profits are zero in the long-run.

Marginal revenue equals price.

Price elasticity of demand is defined as

Question 47 options:

The percentage change in quantity demanded divided by the percentage change in price.

The percentage change in price divided by the change in quantity demanded

The percentage change in price divided by the percentage change in quantity demanded.

The change in quantity demanded divided by the percentage change in price

When Marginal utility diminishes, total utility:

Question 48 options:

Increases at a diminishing rate

Diminishes

Stays constant

Increases

Question 49 (4 points)
If consumer incomes go up and laundromats are an inferior good, the effect on the demand for laundromats, ceteris paribus, will be a (an):

Question 49 options:

decrease in the quantity demanded of laundromats

increase in the demand for laundromats

increase in the quantity demanded of laundromats

decrease in the demand for laundromats

A characteristic of an oligopoly is:

Question 50 options:

Few firms exhibiting mutual interdependence

Many firms with independent pricing decisions.

Single firm with control over price.

None of the above.

Answer 1

(41) For a monopoly firm, the marginal revenue curve lies below the market demand curve.

Answer: Option (B)

(47) Price elasticity of demand = (% change in quantity demanded / % change in the price )

Therefore the price elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in price.

Answer: Option (A)

(48) Total utility is the sum of the marginal utility. When marginal utility diminishes, total utility increases at a decreasing rate.

Answer: Option (A)

(49) Laundromats are an inferior good. An increase in the income of consumers will decrease the demand for laundromats.

When there is a change in the quantity purchased of a good due to change in the price of that good, then this is called a change in quantity demanded. So, if there is increase in quantity purchased of a good then it is called increase in quantity demanded and if there is decrease in quantity purchased of a good then it is called decrease in quantity demanded.

When there is a change in quantity purchased of a good due to other factors (and keeping price unchanged), then this is called a change in demand. So, if there is an increase in quantity purchased then it is called an increase in demand and if there is a decrease in quantity purchased then it is called a decrease in demand.

Answer: Option (D)

(50) A characteristic of an oligopoly is few firms exhibiting mutual interdependence.

Answer: Option (A)