3 Compared to perfect competition, a monopolist: A) Raises price B) Makes more profit C) Restricts output D) Restricts output, raises price, and makes more profit. Question 4 To achieve monopoly profits, every would be monopolist needs: A) patent protection. B) A large advertising budget. C) Barriers that keep other firms from entering the industry. D) A superior product. Question 8 Suppose that a monopoly firm is in long run equilibrium and then the firm experiences an increase in fixed cost. Suppose further that the increase is less than the economic profit that the firm was earning. In response to the increase in fixed cost, the firm will: A) Not change its price. B) Raise its price by somewhat more than the cost increase. C) Raise its price by the amount of the cost increase. D) Raise its price but by less than the increase in cost. Question 9 Which of the following industries is most likely to be perfectly competitive? A) Automobiles B) Beef cattle C) Industrial chemicals D) Electric utilities Question 10 Which of the following industries is most likely to be monopolistic? A) Industrial chemicals B) Automobiles C) Beef cattle D) Electric utilities Question 16 The demand curve facing an oligopolist has a distinctive shape. It A) Slopes upward because of the prisoner's dilemma. B) Has a hump in the middle, going up and then down. C) Declines along a rectangular hyperbola. D) Has a kink, going down slowly and then suddenly going down faster. Question 17 Which of the following industries is most likely to be an oligopoly? A) Industrial chemicals B) Electric utilities C) Automobiles D) Beef cattle Question 25 Which of the following industries is most likely to be characterized by monopolistic competition? A) Beef cattle B) Electric utilities C) Industrial chemicals D) Automobiles Question 26 A producer in an industry characterized by monopolistic competition in long run equilibrium will maximize profit by producing at a quantity that: A) Makes price = Marginal cost B) Makes marginal revenue = marginal cost C) Makes economic profits equal zero D) Both b and c Question 27 Oligopoly is a market structure characterized by: A) A horizontal demand curve. B) A small number of interdependent firms. C) Independence in decision making. D) Relatively easy entry and exit