Question 1

In order to sell more of its product,a monopolist must

Accepted Answer

A)   lobby the government for a subsidy.
B)   lower its price.
C)   advertise.
D)   enact barriers to entry in related markets.E) None of the above
F) A) and C)

Question 2

Additional firms often do not try to compete with a natural monopoly because

Accepted Answer

A)   they fear retaliation in the form of pricing wars from the natural monopolist.
B)   they are unsure of the size of the market in general.
C)   they know they cannot achieve the same low costs that the natural monopolist enjoys.
D)   the natural monopoly does not make a large profit.E) C) and D)
F) None of the above

Question 3

Table 15-17
 
-Refer to Table 15-17.If a monopolist faces a constant marginal cost of $4,how much output should the firm produce?

Accepted Answer

A)   3 units
B)   4 units
C)   5 units
D)   6 unitsE) A) and B)
F) B) and D)

Question 4

Figure 15-4 
-Refer to Figure 15-4.Profit on a typical unit sold for a profit-maximizing monopoly would equal

Accepted Answer

A)   P5-P0.
B)   P4-P2.
C)   P4-P1.
D)   P4-P3.E) C) and D)
F) B) and D)

Question 5

A common solution to monopoly in European countries is public ownership.

Accepted Answer

A) True 
 B)False

Question 6

A fundamental source of monopoly market power arises from

Accepted Answer

A)   perfectly elastic demand.
B)   perfectly inelastic demand.
C)   barriers to entry.
D)   availability of "free" natural resources,such as water or air.E) C) and D)
F) None of the above

Question 7

When a monopolist increases the amount of output that it produces and sells,the price of its output

Accepted Answer

A)   stays the same.
B)   increases.
C)   decreases.
D)   may increase or decrease depending on the price elasticity of demand.E) B) and C)
F) None of the above

Question 8

Price discrimination is a rational strategy for a profit-maximizing monopolist when

Accepted Answer

A)   the monopolist finds itself able to produce only limited quantities of output.
B)   consumers are unable to be segmented into identifiable markets.
C)   the monopolist wishes to increase the deadweight loss that results from profit-maximizing behavior.
D)   there is no opportunity for arbitrage across market segments.E) B) and C)
F) A) and B)

Question 9

Assume that a monopolist decides to maximize revenue rather than profit.How does this operating objective change the size of the deadweight loss? If you are a "benevolent" manager of a monopoly firm and are interested in reducing the deadweight loss of monopoly,should you maximize profits or maximize revenue? Explain your answer.

Accepted Answer

A revenue maximizer operates where MR = ...

Question 10

Figure 15-6 
-Refer to Figure 15-6.A profit-maximizing monopolist would incur total costs of

Accepted Answer

A)   $81.
B)   $120.
C)   $144.
D)   $240.E) A) and D)
F) A) and C)

Question 11

Because a monopolist does not face competition from other firms,the outcome in a market with a monopoly

Accepted Answer

A)   does not illustrate profit maximization.
B)   is often not in the best interest of society.
C)   is characterized by unlimited profits.
D)   would be improved if the government produced the product rather than a private firm.E) None of the above
F) C) and D)

Question 12

Figure 15-4  x Q4. D)  (P4-P2) x Q3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 15-4.A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A)   P4 x Q3.
B)   P5 x Q1.
C)   P3  x Q4.
D)   (P4-P2) x Q3.E) A) and B)
F) B) and C)

Question 13

In a market characterized by monopoly,the market demand curve is

Accepted Answer

A)   upward sloping.
B)   horizontal.
C)   downward sloping.
D)   vertical.E) A) and C)
F) C) and D)

Question 14

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Accepted Answer

A) True 
 B)False

Question 15

For a firm to price discriminate,

Accepted Answer

A)   it must be a natural monopoly.
B)   it must be regulated by the government.
C)   it must have some market power.
D)   consumers must tell the firm what they are willing to pay for the product.E) A) and B)
F) All of the above

Question 16

In the majority of cases where there is a natural monopoly in the United States,the government usually deals with the problem

Accepted Answer

A)   by splitting the natural monopoly into smaller companies.
B)   through regulation.
C)   by turning the natural monopoly into a public enterprise.
D)   by doing nothing.E) A) and B)
F) None of the above

Question 17

A firm cannot price discriminate if it

Accepted Answer

A)   has perfect information about consumer demand.
B)   operates in a competitive market.
C)   faces a downward-sloping demand curve.
D)   is regulated by the government.E) B) and C)
F) All of the above

Question 18

If the government deems a newly-invented drug to be truly original,the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Accepted Answer

A) True 
 B)False

Question 19

A monopoly

Accepted Answer

A)   can set the price it charges for its output and earn unlimited profits.
B)   takes the market price as given and earns small but positive profits.
C)   can set the price it charges for its output but faces a downward-sloping demand curve so it cannot earn unlimited profits.
D)   can set the price it charges for its output but faces a horizontal demand curve so it can earn unlimited profits.E) A) and B)
F) A) and C)

Question 20

The key issue in determining the efficiency of public versus private ownership of a monopoly is

Accepted Answer

A)   the tendency for efficient management of publicly owned enterprises.
B)   the inability of private monopolies to get rid of managers that are doing a bad job.
C)   the propensity of private monopolies to generate excessive profits.
D)   how ownership of the firm affects the cost of production.E) C) and D)
F) A) and B)

Exam 15: Monopoly

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Correct Answer
verified

Correct Answer
verified
A revenue maximizer operates where MR = ...
View Answer

When a monopolist increases the amount of output that it produces and sells,the price of its output

Correct Answer
verified

Price discrimination is a rational strategy for a profit-maximizing monopolist when

Correct Answer
verified

Figure 15-4 -Refer to Figure 15-4.Profit on a typical unit sold for a profit-maximizing monopoly would equal

Correct Answer
verified

In the majority of cases where there is a natural monopoly in the United States,the government usually deals with the problem

Correct Answer
verified

Because a monopolist does not face competition from other firms,the outcome in a market with a monopoly

Correct Answer
verified

In order to sell more of its product,a monopolist must

Correct Answer
verified

A fundamental source of monopoly market power arises from

Correct Answer
verified

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $4,how much output should the firm produce?

Correct Answer
verified

Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's total revenue is equal to

Correct Answer
verified

A monopoly

Correct Answer
verified

A firm cannot price discriminate if it

Correct Answer
verified

Figure 15-6 -Refer to Figure 15-6.A profit-maximizing monopolist would incur total costs of

Correct Answer
verified

A common solution to monopoly in European countries is public ownership.

Correct Answer
verified

In a market characterized by monopoly,the market demand curve is

Correct Answer
verified

The key issue in determining the efficiency of public versus private ownership of a monopoly is

Correct Answer
verified

For a firm to price discriminate,

Correct Answer
verified

If the government deems a newly-invented drug to be truly original,the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Correct Answer
verified

Additional firms often do not try to compete with a natural monopoly because

Correct Answer
verified

Exam 15: Monopoly

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA revenue maximizer operates where MR = ...View AnswerShow Answer

When a monopolist increases the amount of output that it produces and sells,the price of its output

Correct AnswerverifiedShow Answer

Price discrimination is a rational strategy for a profit-maximizing monopolist when

Correct AnswerverifiedShow Answer

Figure 15-4 -Refer to Figure 15-4.Profit on a typical unit sold for a profit-maximizing monopoly would equal

Correct AnswerverifiedShow Answer

In the majority of cases where there is a natural monopoly in the United States,the government usually deals with the problem

Correct AnswerverifiedShow Answer

Because a monopolist does not face competition from other firms,the outcome in a market with a monopoly

Correct AnswerverifiedShow Answer

In order to sell more of its product,a monopolist must

Correct AnswerverifiedShow Answer

A fundamental source of monopoly market power arises from

Correct AnswerverifiedShow Answer

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $4,how much output should the firm produce?

Correct AnswerverifiedShow Answer

Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's total revenue is equal to

Correct AnswerverifiedShow Answer

A monopoly

Correct AnswerverifiedShow Answer

A firm cannot price discriminate if it

Correct AnswerverifiedShow Answer

Figure 15-6 -Refer to Figure 15-6.A profit-maximizing monopolist would incur total costs of

Correct AnswerverifiedShow Answer

A common solution to monopoly in European countries is public ownership.

Correct AnswerverifiedShow Answer

In a market characterized by monopoly,the market demand curve is

Correct AnswerverifiedShow Answer

The key issue in determining the efficiency of public versus private ownership of a monopoly is

Correct AnswerverifiedShow Answer

For a firm to price discriminate,

Correct AnswerverifiedShow Answer

If the government deems a newly-invented drug to be truly original,the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Correct AnswerverifiedShow Answer

Additional firms often do not try to compete with a natural monopoly because

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A revenue maximizer operates where MR = ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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