AP Micro Unit 4 Test Multiple Choice Practice

AP Micro Unit 4 Test Multiple Choice Practice Latest Update 2025-2026 Exam 60 Questions with 100% Verified Correct Answers Guaranteed A+

A - CORRECT ANSWER: For the monopolist to the right, DWL is:

• DB
• CD
• AB

D. CDB

E. DBA

A - CORRECT ANSWER: In equilibrium, the firm will realize:

• an economic profit of P0JD
• an economic profit of PIJD
• an economic profit of SIHB
• a loss of DB per unit
• a loss of SIHB

A - CORRECT ANSWER: The nondiscriminating monopolist's demand curve:

• Is less elastic than a purely competitive firm's demand curve
• is perfectly elastic
• coincides with its marginal revenue curve
• is perfectly inelastic

A - CORRECT ANSWER: Which of the following must be true for a firm that is a natural monopoly? (think GA Power) 1 / 2

• it can produce and supply its product to an entire market at a lower cost than could a

number of smaller firms

• it produces at the minimum of its average total cost curve
• it has a patent on its product
• it will not be able to maximize profits unless subsidized by the government
• it is productively efficient for the government to break up the monopoly into smaller

firms

B - CORRECT ANSWER: Compared to industry represented in 1, the price for the

industry represented in 2 will be ________ and the quantity will be ________.

• higher, higher
• higher, lower
• lower, lower
• lower, higher
• same

B - CORRECT ANSWER: Comparing a pure monopoly and a purely competitive firm

with identical costs, we would find in long-run equilibrium that the pure monopolist's:

• price, output, and ATC would all be higher
• price and ATC would be higher, but output would be lower
• price, output, and ATC would be lower
• price and output would be lower, but ATC would be higher

B - CORRECT ANSWER: Economic profit can e calculated as accounting profit minus

which of the following?

• fixed costs
• implicit costs
• marginal costs
• explicit costs
• / 2