Question #52955

TRUE/FALSE
1. In a natural monopoly, the long - run average cost curve declines and therefore average cost is lower when there is only one seller.
2. A natural monopoly maximizes profits at the point at which price equals minimum average total cost.
3. A monopoly earns the most profit by charging a price where demand is inelastic.
4. When a monopoly price discriminates, it charges the highest price to the group of buyers with the least elastic demand.

Expert's answer

TRUE/FALSE

1. In a natural monopoly, the long - run average cost curve declines and

therefore average cost is lower when there is only one seller - false.

2. A natural monopoly maximizes profits at the point at which price equals minimum average total cost - false.

3. A monopoly earns the most profit by charging a price where demand is inelastic - true.

4. When a monopoly price discriminates, it charges the highest price to

the group of buyers with the least elastic demand - true.

1. In a natural monopoly, the long - run average cost curve declines and

therefore average cost is lower when there is only one seller - false.

2. A natural monopoly maximizes profits at the point at which price equals minimum average total cost - false.

3. A monopoly earns the most profit by charging a price where demand is inelastic - true.

4. When a monopoly price discriminates, it charges the highest price to

the group of buyers with the least elastic demand - true.

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