16) [1 point] There are many differences between a market served by a monopoly and a market that is
perfectly competitive. Which of these followings are true for monopoly only?
a. The price is higher than in other market structures.
b. An efficient quantity is produced.
c. Firms can earn positive economic profit in the long run.
d. There are significant barriers to entry.
e. Firms have no market power.
f. A firm is a price maker.
g. A firm is a price taker.
A) a, c, f
B) c, d, f
C) b, c, d, f
D) a, b, d, f
E) a, c, d, f
17) [1 point] Suppose the GoLogos logo monopoly is broken up, and the logo industry becomes perfectly
competitive. We would expect
A) consumer; producer and total
B) producer; consumer and total
C) consumer and total; producer
D) producer and total; consumer
E) total; consumer and producer
surplus to increase and
surplus to decrease after the breakup.
The graph below depicts the market for electricity in Ohio which is operated by a monopolist. Use this
graph to answer questions 18-20.
Price, marginal
revenue, marginal
cost, average
total cost
MC
ATC
Z
DEF
B
U
H
Demand
MR
0
W
JKL N
Quantity (per period)
18) [1 point] When the firm is maximizing its economic profit, its total cost is represented by:
A) OIHJ.
B) IPDH.
C) OPDJ.
D) OSBJ.
E) OSUK.