Question 1

Table 15-9
Consider the following demand and cost information for a monopoly. 
-Refer to Table 15-9. What is the marginal cost of the 4th unit?

Accepted Answer

A)  $4
B)  $14
C)  $31
D)  $62E) A) and C)
F) A) and B)

Question 2

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to

Accepted Answer

A)  $3.
B)  $4.
C)  $24.
D)  -$4.E) C) and D)
F) A) and B)

Question 3

Scenario 15-1
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is:
Passenger Type
Willingness to Pay
Demand per day
Adults
$18
70
Children
$10
25
Senior Citizens
$12
55
Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.
-Refer to Scenario 15-1. One of Vincent's friends tells him he would be more profitable if he charged a single price of $18. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $18?

Accepted Answer

The answer of Scenario 15-1
Vincent operates a scenic tour business...

Question 4

Table 15-6
A monopolist faces the following demand curve: 
-Refer to Table 15-6. What is the marginal revenue from the sale of the 3rd unit?

Accepted Answer

A)  -$3
B)  $3
C)  $9
D)  $24E) A) and B)
F) B) and C)

Question 5

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Accepted Answer

A)  offset by regulatory revenues.
B)  called a deadweight loss.
C)  equal to the monopolist's profit.
D)  Both b and c are correct.E) A) and D)
F) B) and D)

Question 6

Financial aid to college students, quantity discounts, and senior citizen discounts are all examples of

Accepted Answer

A)  consumer surplus.
B)  deadweight loss.
C)  price discrimination.
D)  nonprofit pricing strategies.E) B) and D)
F) All of the above

Question 7

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Accepted Answer

A)  $22.
B)  $27.
C)  $54.
D)  $108.E) None of the above
F) A) and B)

Question 8

Figure 15-2 
-Refer to Figure 15-2. Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Accepted Answer

A)  monopoly resources
B)  government regulation
C)  the production process
D)  Both a and b are correct.E) None of the above
F) B) and D)

Question 9

A monopolist faces the following demand curve:  The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Accepted Answer

A)  400
B)  500
C)  900
D)  4,200E) B) and C)
F) All of the above

Question 10

Which of the following would be most likely to have monopoly power?

Accepted Answer

A)  a national florist
B)  an online bookstore
C)  a local restaurant
D)  a local electrical cooperativeE) All of the above
F) B) and C)

Question 11

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if

Accepted Answer

A)  adults buy more popcorn than children.
B)  the cost of showing a movie to children is less than the cost of showing a movie to adults.
C)  it has some degree of monopoly-pricing power.
D)  All of the above are correct.E) C) and D)
F) B) and D)

Question 12

For a monopolist,

Accepted Answer

A)  average revenue is always greater than the price of the good.
B)  marginal revenue is always less than the price of the good.
C)  marginal cost is always greater than average total cost.
D)  marginal revenue equals marginal cost at the point where total revenue is maximized.E) A) and C)
F) All of the above

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 D)
F) B) and C)

Question 14

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) A) and D)
F) B) and C)

Question 15

Figure 15-4 
-Refer to Figure 15-4. The demand curve for a monopoly firm is depicted by curve

Accepted Answer

A)  A.
B)  B.
C)  C.
D)  D.E) None of the above
F) A) and D)

Question 16

Generic drugs enter the pharmaceutical drug market once

Accepted Answer

A)  the ingredients to the name brand drug have been discovered.
B)  10 years have passed.
C)  they are patented.
D)  the patent on the name brand drug expires.E) None of the above
F) B) and C)

Question 17

Which of the following is not an example of a barrier to entry?

Accepted Answer

A)  John owns the only parcel of lakeside property with a beach that is safe for swimming. He charges admission to neighbors who want to use the beach.
B)  Jackie owns the copyright to a popular song. She receives royalties every time a radio station plays her song.
C)  John Jr. owns the best seafood restaurant in a popular resort area. He charges high prices because the quality of the food is so good.
D)  Caroline owns the patent for a new running shoe. She receives payments from the company who manufactures the shoes.E) All of the above
F) B) and C)

Question 18

A monopolist's profits with price discrimination will be

Accepted Answer

A)  lower than if the firm charged a single, profit-maximizing price
B)  the same as if the firm charged a single, profit-maximizing price.
C)  higher than if the firm charged just one price because the firm will capture more consumer surplus.
D)  higher than if the firm charged a single price because the costs of selling the good will be lower.E) A) and D)
F) B) and C)

Question 19

Table 15-9
Consider the following demand and cost information for a monopoly. 
-Refer to Table 15-9. What is the monopolist's average total cost of production at the profit-maximizing price?

Accepted Answer

A)  $12
B)  $14
C)  $16
D)  $17E) A) and D)
F) All of the above

Question 20

The distribution of water to residents of a town and an infrequently used bridge are examples of

Accepted Answer

The answer of The distribution of water to residents of...

Exam 15: Monopoly

The distribution of water to residents of a town and an infrequently used bridge are examples of

Correct Answer
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Figure 15-2 -Refer to Figure 15-2. Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Correct Answer
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Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the monopolist's average total cost of production at the profit-maximizing price?

Correct Answer
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Financial aid to college students, quantity discounts, and senior citizen discounts are all examples of

Correct Answer
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If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to

Correct Answer
verified

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Correct Answer
verified

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Correct Answer
verified

For a monopolist,

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not an example of a barrier to entry?

Correct Answer
verified

Generic drugs enter the pharmaceutical drug market once

Correct Answer
verified

Figure 15-4 -Refer to Figure 15-4. The demand curve for a monopoly firm is depicted by curve

Correct Answer
verified

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Correct Answer
verified

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if

Correct Answer
verified

Which of the following would be most likely to have monopoly power?

Correct Answer
verified

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. What is the marginal revenue from the sale of the 3rd unit?

Correct Answer
verified

Correct Answer
verified

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Correct Answer
verified

A monopolist's profits with price discrimination will be

Correct Answer
verified

Exam 15: Monopoly

The distribution of water to residents of a town and an infrequently used bridge are examples of

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2. Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the monopolist's average total cost of production at the profit-maximizing price?

Correct AnswerverifiedShow Answer

Financial aid to college students, quantity discounts, and senior citizen discounts are all examples of

Correct AnswerverifiedShow Answer

If a monopolist can sell 7 units when the price is $4 and 8 units when the price is $3, then the marginal revenue of selling the eighth unit is equal to

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Correct AnswerverifiedShow Answer

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Correct AnswerverifiedShow Answer

For a monopolist,

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

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

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Which of the following is not an example of a barrier to entry?

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Generic drugs enter the pharmaceutical drug market once

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Figure 15-4 -Refer to Figure 15-4. The demand curve for a monopoly firm is depicted by curve

Correct AnswerverifiedShow Answer

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Correct AnswerverifiedShow Answer

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if

Correct AnswerverifiedShow Answer

Which of the following would be most likely to have monopoly power?

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Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. What is the marginal revenue from the sale of the 3rd unit?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Correct AnswerverifiedShow Answer

A monopolist's profits with price discrimination will be

Correct AnswerverifiedShow Answer

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