1. Whichoneofthefollowingisthemostaccuratedescriptionofamonopolist?

A. asoleproducerofanarrowlydefined productclass

B.firmthatisverylargerelative toallitscompetitorswithinnarrowproduct lass.

C. asoleproducerofaproductforwhichgoodsubstitutesarelackinginamarket withhigh barrierstoentry

D.large,multinationalfirmthatproducesasingleproductionanarrowproductclass

2. A firm that holds a monopoly power in the market place is

A. a price maker.

B. a price taker.

C. monopolistically competitive.

D. subject to infinite market forces.

3. In the United States, a pharmaceutical company's exclusive patent rights last for

A. 20 years.

B. 25 years.

C. 10 years.

D. 70 years.

4. Theslopeofthedemand curveforamonopolyfirmis

A. horizontal,paralleltothex-axis.

B. vertical,paralleltothey-axis.

C. upwardsloping.

D. downwardsloping.

5.Themarginal revenuecurveforamonopolist

A. always liesabove themarket demand curve.

B. alwaysliesbeneath themarketdemand curve.

C. alwaysrunsparallel to themarketdemand curve.

D. alwaysisthesame as themarket demand curve.

6. Suppose that a monopoly firm is selling in two markets and is price discriminating between them. Price will be

A. higher in the market in which price elasticity of demand is higher.

B. higher in the market in which price elasticity of demand is lower.

C. higher in the market in which there is a greater number of close substitutes.

D. none of the above, because price discrimination has nothing to do with either price elasticity of demand or product substitutability.

TRUE/FALSE QUESTIONS ( Underline and bold T or F)

7. T F A monopoly produces less product than a purely competitive industry.

8. T F Because the monopoly must lower its price to increase sales, the marginal revenue curve is parallel to the axis.

9. T F Since the demand curve for the product of a monopolistic firm slopes downward, the price elasticity of demand for its product is constant.

10. T F Monopolist doesn't have a supply curve.

11. T F Patent rights are a form of legal monopoly.

Short Answer Questions (Show your works where applicable)

12.Discuss the various factors that go against a monopolistic firm to manipulate price and profits as much as it might wish.

13. In a situation of pure monopoly, why the demand curve and marginal revenue curve aren't the same as perfect competition?

14. How can a monopolist identify the profit maximizing level of output if it knows its marginal revenue and marginal costs?

15.When a monopolist identifies its profit-maximizing level of output, how does it decide what price to charge?