15. A simple monopolist maximizes profit at the quantity where MC _____.

• a. equals AFC
• b. is zero
• c. equals marginal revenue
• d. equals price

16. A simple monopolist can ignore the shut-down rule to cease operations at least temporarily if price is less than average variable cost.

• a. True
• b. False

17. Setting a limit price by an open monopolist limits profit so as to limit future competition.

• a. True
• b. False

18. To attain the benefits of a closed monopoly, a company _____.

• a. will avoid involvement in rent-seeking behavior
• b. must enjoy legal protection from entry by other firms
• c. is closed to involvement with government agencies
• d. is barred from earning a profit but guaranteed of not making a loss

19. A closed monopolist such as the U.S. Post Office benefits from legal protections but must also spend money to defend those protections.

• a. True
• b. False

20. The text states that closed monopolies can experience threats to their profits from _____.

• a. substitute products but not from challenges to legal barriers, as laws are set once and for all
• b. challenges to legal barriers, but not from substitutes as they are costly to make competitive
• c. substitute products and challenges to legal barriers
• d. very few sources, as closed monopolies tend to resist all threats