1.Accounting profit and economic profit differ because economic profit fails to take into account opportunity cost.

Group of answer choices

True

False

2.Draw the perfectly competitive market model which reflect the following question and answer the question. Thedemand curvefor a firm in the perfectly competitive market model is equal to its:

Group of answer choices

average fixed cost curve.

marginal revenue curve.

marginal cost curve.

average total cost curve.

3.Draw the perfectly competitive market model which reflect the following question and answer the question. As long as marginal cost isbelowmarginal revenue, a perfectly competitive firm should:

Group of answer choices

hold production constant.

increase production.

reconsider past production decisions.

decrease production.

4.A profit-maximizing monopolist will always set price equal to marginal cost.

Group of answer choices

True

False

5.Monopolies that exist because economies of scale create a barrier to entry are called natural monopolies.

Group of answer choices

True

False

6.Monopoly is a market structure in which:

Group of answer choices

a few firms dominate the market.

many firms produce identical products.

one firm makes up the entire market.

many firms produce differentiated products.

7.A significant difference between monopoly and perfect competition is that:

Group of answer choices

the monopolist's demand curve is the industry demand curve, whereas the competitive firm's demand curve is perfectly elastic.

profits are driven to zero in a monopolized industry but may be positive in a competitive industry.

free entry and exit is possible in a monopolized industry but impossible in a competitive industry.

competitive firms control market supply, but monopolies do not.

8.Marginal revenue is not equal to price for a monopolist because:

Group of answer choices

total revenue increases as output increases.

the monopolist's demand curve is below its marginal revenue curve.

the monopolist sets price equal to marginal cost.

the monopolist must lower the price of all units in order to sell more.