Economics Micro & Macro (CliffsAP)

Part IV: AP Macroeconomics & Microeconomics Tests

43. Question 43 refers to the following graph.

Which of the following statements is truefor a monopolistic firm?

A. Profit maximizing quantity is where marginal cost equals marginal revenue.

B. Profit maximizing price is where average total cost is equal to marginal cost.

C. The profit maximizing point is where demand intersects marginal cost.

D. P^1 is the profit maximizing price.

E. A monopolist will make a profit no matter what price it charges.

Q^1 Quantity

D

ATC

MC

MR

P^1

Price

44. Which of the following statements is truefor a
    monopolistic firm?
    A. A monopolistic firm always produces at an
    efficient level of output.
    B. The price that a monopolist charges is where
    marginal revenue is equal to marginal cost.
    C. The price that a monopolist charges is
    decided in the market.
    D. The demand curve that a monopolist faces is
    industry demand.
    E. A monopolist produces where average total
    cost is equal to demand.