Micro Economics MCQ (GK Set-1) with Answers

The best strategy for the monopolist is to set the highest prices for the types of customer with the least elastic demand

Some customers will face a higher price than they would if the firm did not adopt price discrimination

By having a relatively low price for some groups of customers, the monopolist is sure to make less profit than it would without price discrimination

The monopolist might be able to make more profit by instead discriminating between different individual customers

The firm may make a profit indefinitely

The firm’s SMC curve and its LMC curve will both intersect its MR curve at its chosen output.

The firm’s SAC curve will intersect its LAC curve at its chosen output

If the firm suddenly started to worry about the prospect of new entrants, it might decide to reduce its price

It faces a downward sloping demand curve

Its demand curve, and those for its competitors, may all be in different positions

It will produce at the output where its MR and SMC curves intersect, provided it would make either a profit or a loss that was less than its total fixed cost.

It supply curve is part of its marginal cost curve

The firm will just break even

The firm’s SMC curve and its LMC curve will just touch each other at its chosen output.

The firm’s SAC curve and its LAC curve will just touch each other at its chosen output.

The firms AR curve and its SAC curve will just touch each other at its chosen output

There are many firms in monopolistic competition and only one in monopoly.

The monopolist may make a profit in the long run whereas the monopolistic competitor will not

Price discrimination is less common with monopolists than with monopolistic competitors

A monopolist would never react to the imposition of a tax on its product by reducing its price, but a monopolistic competitor might