13.

For a perfectly competitive firm, if MR > AVC and MR > MC, then the firm should:

A)

increase production.

B)

continue to produce at the same level of output.

C)

reduce production.

D)

shut down.

14.

Market power means the ability to:

A)

earn a normal profit.

B)

earn an economic profit.

C)

have some control over price.

D)

eliminate competition.

15.

In a monopoly, the price of the good or service is always:

A)

is always less than average total cost.

B)

equal to marginal revenue.

C)

greater than marginal revenue.

D)

less than marginal revenue.

16.

A monopolist will maximize its profit when it produces the quantity of output where:

A)

MC is minimized.

B)

MR = P.

C)

MR = MC.

D)

P is maximized.