Q1. If all firms in a perfectly competitive market were replaced with a monopolist, which of the following would be true about the new equilibrium?

A. Consumer surplus falls.

B. Total surplus falls.

C. The market quantity decreases.

D. All of the above.

Q2. In a scenario where demand is relatively inelastic and a monopolist raises the price of its output, then the quantity would fall by a __________ percentage than the rise in price, which results in a(n) __________ in profit.

A. larger; increase.

B. larger; decrease.

C. smaller; increase.

D. smaller; decrease.

Q3. Maximizing monopoly profit is represented by the condition __________, whereas maximizing social welfare is represented by the condition __________.

A. Marginal revenue equals marginal cost; Price equals marginal cost.

B. Marginal revenue equals average total cost; Price equals marginal cost.

C. Price equals average total cost; Price equals marginal revenue.

D. Price equals marginal revenue; Marginal revenue equals marginal cost.