Question 1

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6. If the monopolist has a constant marginal cost for her product equal to $7, what is her profit- maximizing price?

Accepted Answer

A)   $6
B)   $9
C)   $12
D)   $15E) A) and D)
F) B) and C)

Question 2

A monopolist produces

Accepted Answer

A)   more than the socially efficient quantity of output but at a higher price than in a competitive market.
B)   less than the socially efficient quantity of output but at a higher price than in a competitive market.
C)   the socially efficient quantity of output but at a higher price than in a competitive market.
D)   possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market.E) A) and B)
F) All of the above

Question 3

Because a monopolist is the sole producer in its market, it can necessarily alter the price of its good (i)  without affecting the quantity sold.
(ii)  without affecting its average total cost.
(iii)  by adjusting the quantity it supplies to the market.

Accepted Answer

A)   (ii)  only
B)   (iii)  only
C)   (i)  and (ii)  only
D)   (ii)  and (iii)  onlyE) None of the above
F) C) and D)

Question 4

Price discrimination adds to social welfare in the form of (i)  increased total surplus.
(ii)  reduced costs of production.
(iii)  increased consumer surplus.

Accepted Answer

A)   (i)  only
B)   (i)  and (ii)  only
C)   (i)  and (iii)  only
D)   (i) , (ii) , and (iii) E) None of the above
F) A) and D)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true? (i)  When a competitive firm sells an additional unit of output, its revenue increases by an amount less than the price.
(ii)  When a monopoly firm sells an additional unit of output, its revenue increases by an amount less than the price.
(iii)  Average revenue is the same as price for both competitive and monopoly firms.

Accepted Answer

A)   (ii)  only
B)   (iii)  only
C)   (i)  and (ii)  only
D)   (ii)  and (iii)  onlyE) B) and D)
F) A) and C)

Question 7

Table 15-10
The monopolist faces the following demand curve:
 
-Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, how much profit can the firm earn at the profit-maximizing level of output?

Accepted Answer

A)   $128
B)   $120
C)   $80
D)   $8E) A) and C)
F) None of the above

Question 8

Most markets are not monopolies in the real world because

Accepted Answer

A)   firms usually face downward-sloping demand curves.
B)   supply curves slope upward.
C)   firms usually equate price with marginal cost.
D)   there are reasonable substitutes for most goods.E) C) and D)
F) None of the above

Question 9

Which of the following statements is correct?

Accepted Answer

A)   Public ownership is preferred to regulation in order to minimize the deadweight losses associated with natural monopolies.
B)   Antitrust laws are always the best way to limit monopoly power.
C)   It is possible that the best approach to monopolies is for the government to do nothing.
D)   Marginal-cost pricing requires a natural monopoly to earn zero economic profits.E) None of the above
F) B) and D)

Question 10

Figure 15-22 
-Refer to Figure 15-22. If the monopolist uses perfect price discrimination, how much output does the firm produce?

Accepted Answer

The answer of Figure 15-22 
-Refer to Figure 15-22. If...

Question 11

Figure 15-12 
-Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Accepted Answer

A)   A+B
B)   C+F
C)   G
D)   A+B+C+FE) A) and B)
F) B) and D)

Question 12

Monopoly profit is not a social problem because

Accepted Answer

A)   the size of the economic pie grows when monopoly profits increase.
B)   producers are more efficient than consumers.
C)   the profit represents a transfer from the consumer to the producer with no loss in total surplus.
D)   None of the above are correct.E) C) and D)
F) All of the above

Question 13

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Accepted Answer

perfectly ...

Question 14

Figure 15-24 
-Refer to Figure 15-24. Use the letters in the figure to identify the profit area if this firm were able to perfectly price discriminate.

Accepted Answer

The answer of Figure 15-24 
-Refer to Figure 15-24. Use...

Question 15

For a monopoly firm, the shape and position of the demand curve play a role in determining the (i)  profit-maximizing price.
(ii)  shape and position of the marginal-cost curve.
(iii)  shape and position of the marginal-revenue curve.

Accepted Answer

A)   (i)  and (ii)  only
B)   (ii)  and (iii)  only
C)   (i)  and (iii)  only
D)   (i) , (ii) , and (iii) E) None of the above
F) A) and B)

Question 16

A firm that is a natural monopoly

Accepted Answer

A)   is not likely to be concerned about new entrants eroding its monopoly power.
B)   is taking advantage of diseconomies of scale.
C)   would experience a lower average total cost if more firms entered the market.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 17

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 B)
F) A) and C)

Question 18

Figure 15-8 
-Refer to Figure 15-8. What is the monopoly price and quantity?

Accepted Answer

A)   price = A; quantity = X
B)   price = B; quantity = Y
C)   price = B; quantity = X
D)   price = C; quantity = XE) A) and C)
F) A) and B)

Question 19

When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly

Accepted Answer

A)   will experience a loss.
B)   will experience a price below average total cost.
C)   may rely on a government subsidy to remain in business.
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 20

For a monopoly firm,

Accepted Answer

A)   price always equals marginal revenue.
B)   price always exceeds average revenue.
C)   any price-quantity combination will maximize profits.
D)   None of the above is correct.E) A) and B)
F) All of the above

Exam 15: Monopoly

Figure 15-24 -Refer to Figure 15-24. Use the letters in the figure to identify the profit area if this firm were able to perfectly price discriminate.

Correct Answer
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When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly

Correct Answer
verified

For a monopoly firm, the shape and position of the demand curve play a role in determining the (i) profit-maximizing price. (ii) shape and position of the marginal-cost curve. (iii) shape and position of the marginal-revenue curve.

Correct Answer
verified

Price discrimination adds to social welfare in the form of (i) increased total surplus. (ii) reduced costs of production. (iii) increased consumer surplus.

Correct Answer
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Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. If the monopolist has a constant marginal cost for her product equal to $7, what is her profit- maximizing price?

Correct Answer
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Table 15-10 The monopolist faces the following demand curve: -Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, how much profit can the firm earn at the profit-maximizing level of output?

Correct Answer
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For a monopoly firm,

Correct Answer
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Which of the following statements is correct?

Correct Answer
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Figure 15-22 -Refer to Figure 15-22. If the monopolist uses perfect price discrimination, how much output does the firm produce?

Correct Answer
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Monopoly profit is not a social problem because

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

Correct Answer
verified

Figure 15-12 -Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Correct Answer
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Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Correct Answer
verified
perfectly ...
View Answer

A firm that is a natural monopoly

Correct Answer
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Figure 15-8 -Refer to Figure 15-8. What is the monopoly price and quantity?

Correct Answer
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Correct Answer
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Because a monopolist is the sole producer in its market, it can necessarily alter the price of its good (i) without affecting the quantity sold. (ii) without affecting its average total cost. (iii) by adjusting the quantity it supplies to the market.

Correct Answer
verified

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

Correct Answer
verified

A monopolist produces

Correct Answer
verified

Most markets are not monopolies in the real world because

Correct Answer
verified

Exam 15: Monopoly

Figure 15-24 -Refer to Figure 15-24. Use the letters in the figure to identify the profit area if this firm were able to perfectly price discriminate.

Correct AnswerverifiedShow Answer

When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly

Correct AnswerverifiedShow Answer

For a monopoly firm, the shape and position of the demand curve play a role in determining the (i) profit-maximizing price. (ii) shape and position of the marginal-cost curve. (iii) shape and position of the marginal-revenue curve.

Correct AnswerverifiedShow Answer

Price discrimination adds to social welfare in the form of (i) increased total surplus. (ii) reduced costs of production. (iii) increased consumer surplus.

Correct AnswerverifiedShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. If the monopolist has a constant marginal cost for her product equal to $7, what is her profit- maximizing price?

Correct AnswerverifiedShow Answer

Table 15-10 The monopolist faces the following demand curve: -Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, how much profit can the firm earn at the profit-maximizing level of output?

Correct AnswerverifiedShow Answer

For a monopoly firm,

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Which of the following statements is correct?

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Figure 15-22 -Refer to Figure 15-22. If the monopolist uses perfect price discrimination, how much output does the firm produce?

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Monopoly profit is not a social problem because

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

Correct AnswerverifiedShow Answer

Figure 15-12 -Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

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Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Correct Answerverifiedperfectly ...View AnswerShow Answer

A firm that is a natural monopoly

Correct AnswerverifiedShow Answer

Figure 15-8 -Refer to Figure 15-8. What is the monopoly price and quantity?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Because a monopolist is the sole producer in its market, it can necessarily alter the price of its good (i) without affecting the quantity sold. (ii) without affecting its average total cost. (iii) by adjusting the quantity it supplies to the market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A monopolist produces

Correct AnswerverifiedShow Answer

Most markets are not monopolies in the real world because

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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perfectly ...
View Answer

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