Question 1

Figure 15-3  x Q2. D) (P4-P3) x Q2." class="answers-bank-image d-inline" rel="preload" >

-Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A)  P4 x Q2.
B)  P3 x Q4.
C)  (P4-P2)  x Q2.
D)  (P4-P3) x Q2.E) All of the above
F) C) and D)

Question 2

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 3

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 4

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Accepted Answer

A)  preventing mergers through antitrust laws
B)  regulating the prices that monopolies can charge
C)  doing nothing
D)  None of the above strategies is preferred.Each is a viable strategy.E) None of the above
F) A) and D)

Question 5

Which of the following statements is correct?

Accepted Answer

A)  The demand curve facing a competitive firm is horizontal,as is the demand curve facing a monopolist.
B)  The demand curve facing a competitive firm is downward sloping,whereas the demand curve facing a monopolist is horizontal.
C)  The demand curve facing a competitive firm is horizontal,whereas the demand curve facing a monopolist is downward sloping.
D)  The demand curve facing a competitive firm is downward sloping,as is the demand curve facing a monopolist.E) All of the above
F) A) and D)

Question 6

Which of the following is an example of a barrier to entry?

Accepted Answer

A)  Tom charges a higher price than his competitors for his house-painting services.
B)  Dick obtains a copyright for the new computer game that he invented.
C)  Harry offers free concerts on Sunday afternoons as a form of advertising.
D)  Larry charges a lower price than his competitors for his lawn-mowing services.E) All of the above
F) A) and C)

Question 7

Economists assume that monopolists behave as

Accepted Answer

A)  cost minimizers.
B)  profit maximizers.
C)  price maximizers.
D)  maximizers of social welfare.E) A) and B)
F) A) and C)

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

Question 9

Average revenue for a monopoly is the total revenue divided by the quantity produced.

Accepted Answer

A) True 
 B)False

Question 10

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Accepted Answer

A) True 
 B)False

Question 11

For a monopolist,when does marginal revenue exceed average revenue?

Accepted Answer

A)  never
B)  when output is less than the profit-maximizing level of output
C)  when output is greater than the profit-maximizing level of output
D)  for all levels of output greater than zeroE) All of the above
F) A) and B)

Question 12

Which of the following statements is (are) true of a monopoly?
(i) A monopoly has the ability to set the price of its product at whatever level it desires.
(ii) A monopoly's total revenue will always increase when it increases the price of its product.
(iii) A monopoly can earn unlimited profits.

Accepted Answer

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

Question 13

The best solution to the problem of welfare loss from monopoly is public ownership.

Accepted Answer

A) True 
 B)False

Question 14

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

Accepted Answer

A) True 
 B)False

Question 15

Some companies merge in order to lower costs through efficient joint production.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following are necessary characteristics of a monopoly?
(i) The firm is the sole seller of its product.
(ii) The firm's product does not have close substitutes.
(iii) The firm generates a large economic profit.
(iv) The firm is located in a small geographic market.

Accepted Answer

A)  (i) and (ii) only
B)  (i) and (iii) only
C)  (i) ,(ii) ,and (iii) only
D)  (i) ,(ii) ,(iii) ,and (iv) E) C) and D)
F) B) and C)

Question 17

A monopolist produces where P = MC = MR.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is correct?
Monopolies are socially inefficient because they
(i) charge a price above marginal cost.
(ii) produce too little output.
(iii) earn profits at the expense of consumers.
(iv) maximize the market's total surplus.

Accepted Answer

A)  (iii) only
B)  (iii) and (iv) only
C)  (i) and (ii) only
D)  (i) ,(ii) ,(iii) ,and (iv) E) C) and D)
F) B) and C)

Question 19

Which of the following statements is correct?

Accepted Answer

A)  Two examples of early antitrust laws are the Clinton and Stigler Antitrust Acts.
B)  Antitrust laws automatically prevent mergers between companies that produce similar products.
C)  Antitrust laws reduce the government's power to regulate private companies.
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.E) A) and B)
F) A) and C)

Question 20

A monopolist's supply curve is horizontal.

Accepted Answer

A) True 
 B)False

Exam 15: Monopoly

Figure 15-3 -Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Correct Answer
verified

Which of the following statements is (are) true of a monopoly? (i) A monopoly has the ability to set the price of its product at whatever level it desires. (ii) A monopoly's total revenue will always increase when it increases the price of its product. (iii) A monopoly can earn unlimited profits.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

Correct Answer
verified

Average revenue for a monopoly is the total revenue divided by the quantity produced.

Correct Answer
verified

A monopolist produces where P = MC = MR.

Correct Answer
verified

The best solution to the problem of welfare loss from monopoly is public ownership.

Correct Answer
verified

Economists assume that monopolists behave as

Correct Answer
verified

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Correct Answer
verified

Which of the following statements is correct? Monopolies are socially inefficient because they (i) charge a price above marginal cost. (ii) produce too little output. (iii) earn profits at the expense of consumers. (iv) maximize the market's total surplus.

Correct Answer
verified

Some companies merge in order to lower costs through efficient joint production.

Correct Answer
verified

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Correct Answer
verified

A firm cannot price discriminate if it

Correct Answer
verified

Which of the following is an example of a barrier to entry?

Correct Answer
verified

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

Most markets are not monopolies in the real world because

Correct Answer
verified

Which of the following are necessary characteristics of a monopoly? (i) The firm is the sole seller of its product. (ii) The firm's product does not have close substitutes. (iii) The firm generates a large economic profit. (iv) The firm is located in a small geographic market.

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

A monopolist's supply curve is horizontal.

Correct Answer
verified

For a monopolist,when does marginal revenue exceed average revenue?

Correct Answer
verified

Exam 15: Monopoly

Figure 15-3 -Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true of a monopoly? (i) A monopoly has the ability to set the price of its product at whatever level it desires. (ii) A monopoly's total revenue will always increase when it increases the price of its product. (iii) A monopoly can earn unlimited profits.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

Correct AnswerverifiedShow Answer

Average revenue for a monopoly is the total revenue divided by the quantity produced.

Correct AnswerverifiedShow Answer

A monopolist produces where P = MC = MR.

Correct AnswerverifiedShow Answer

The best solution to the problem of welfare loss from monopoly is public ownership.

Correct AnswerverifiedShow Answer

Economists assume that monopolists behave as

Correct AnswerverifiedShow Answer

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Correct AnswerverifiedShow Answer

Which of the following statements is correct? Monopolies are socially inefficient because they (i) charge a price above marginal cost. (ii) produce too little output. (iii) earn profits at the expense of consumers. (iv) maximize the market's total surplus.

Correct AnswerverifiedShow Answer

Some companies merge in order to lower costs through efficient joint production.

Correct AnswerverifiedShow Answer

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Correct AnswerverifiedShow Answer

A firm cannot price discriminate if it

Correct AnswerverifiedShow Answer

Which of the following is an example of a barrier to entry?

Correct AnswerverifiedShow Answer

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

Most markets are not monopolies in the real world because

Correct AnswerverifiedShow Answer

Which of the following are necessary characteristics of a monopoly? (i) The firm is the sole seller of its product. (ii) The firm's product does not have close substitutes. (iii) The firm generates a large economic profit. (iv) The firm is located in a small geographic market.

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

A monopolist's supply curve is horizontal.

Correct AnswerverifiedShow Answer

For a monopolist,when does marginal revenue exceed average revenue?

Correct AnswerverifiedShow Answer

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

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