Question 1

Exhibit 9-3   At the profit-maximizing output for the firm in Exhibit 9-3, the single price monopolist will charge _____ per unit of output.

Accepted Answer

A) $30 
B) $24 
C) $22 
D) $20 
E) $10 
A) $30 
B) $24 
C) $22 
D) $20 
E) $10

Question 2

Exhibit 9-18   The firm in Exhibit 9-18, the monopolist who charges the same price to all customers, will produce how many units of output?

Accepted Answer

A) 1 unit 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units 
A) 1 unit 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units

Question 3

Exhibit 9-2   In Exhibit 9-2, the average revenue of the fourth unit is

Accepted Answer

A) $12 
B) $3 
C) $4 
D) -$4 
E) $0 
A) $12 
B) $3 
C) $4 
D) -$4 
E) $0

Question 4

Suppose that the only maker of a particular type of horse hair clothing exits the industry because demand is too low.The correct analysis of this situation is that

Accepted Answer

A) the producer's decision is irrational, since monopolies are not limited by the demand curve 
B) the producer's decision is irrational, since monopolies never go out of business 
C) the producer's decision is irrational, since it could simply raise the price 
D) the price received by the producer was lower than the marginal cost in the long run 
E) the price received by the producer was lower than the average total cost in the long run 
A) the producer's decision is irrational, since monopolies are not limited by the demand curve 
B) the producer's decision is irrational, since monopolies never go out of business 
C) the producer's decision is irrational, since it could simply raise the price 
D) the price received by the producer was lower than the marginal cost in the long run 
E) the price received by the producer was lower than the average total cost in the long run

Question 5

On a graph, to determine the price a profit-maximizing monopolist would charge, find the quantity at which MC and MR intersect and read up to the demand curve.

Accepted Answer

A) True 
 B)False

Question 6

Jewelers are willing to hold large inventories of diamonds

Accepted Answer

A) because the demand for diamonds is large and growing 
B) because that minimizes the fixed cost of producing diamond jewelry 
C) because, given De Beers' control of the market, they are confident that the price of diamonds will not plummet rapidly 
D) because, given De Beers' control of the market, they are confident that the price of diamonds will rise rapidly 
E) because that is what their customers expect them to do 
A) because the demand for diamonds is large and growing 
B) because that minimizes the fixed cost of producing diamond jewelry 
C) because, given De Beers' control of the market, they are confident that the price of diamonds will not plummet rapidly 
D) because, given De Beers' control of the market, they are confident that the price of diamonds will rise rapidly 
E) because that is what their customers expect them to do

Question 7

Exhibit 9-11   If the monopolist in Exhibit 9-11 chooses to produce 1, 000 units and does not price discriminate, its profit will be

Accepted Answer

A) $0 
B) $104, 000 
C) $212, 000 
D) maximized 
E) negative 
A) $0 
B) $104, 000 
C) $212, 000 
D) maximized 
E) negative

Question 8

Exhibit 9-5   The total revenue for the nondiscriminating monopolist at its profit-maximizing quantity in Exhibit 9-5 is

Accepted Answer

A) $16, 200 
B) $36, 000 
C) $39, 600 
D) $30, 800 
E) $31, 000 
A) $16, 200 
B) $36, 000 
C) $39, 600 
D) $30, 800 
E) $31, 000

Question 9

Unlike firms in a perfectly competitive industry, monopolists have control over

Accepted Answer

A) the price they charge for the product 
B) the quantity of output they produce 
C) the prices they pay for resources 
D) the quantities of various resources which are used 
E) improvements in technology 
A) the price they charge for the product 
B) the quantity of output they produce 
C) the prices they pay for resources 
D) the quantities of various resources which are used 
E) improvements in technology

Question 10

The practice of charging different prices to different consumers of the same product is called

Accepted Answer

A) monopolistic pricing 
B) unit pricing 
C) price discrimination 
D) elasticity pricing 
E) marginal cost pricing 
A) monopolistic pricing 
B) unit pricing 
C) price discrimination 
D) elasticity pricing 
E) marginal cost pricing

Question 11

Average revenue, demand, and price are all depicted by the same curve for a monopoly.

Accepted Answer

A) True 
 B)False

Question 12

Exhibit 9-3   The total cost for the firm in Exhibit 9-3, a monopolist that maximizes profit while charging all customers the same price, is

Accepted Answer

A) $3, 300 
B) $3, 400 
C) $2, 808 
D) $2, 340 
E) $1, 638 
A) $3, 300 
B) $3, 400 
C) $2, 808 
D) $2, 340 
E) $1, 638

Question 13

Price discrimination will occur whenever a firm faces a downward-sloping demand curve.

Accepted Answer

A) True 
 B)False

Question 14

A profit-maximizing monopolist never produces along the __________ portion of the demand curve because marginal revenue is __________ there.

Accepted Answer

A) elastic; positive 
B) elastic; negative 
C) inelastic; negative 
D) inelastic; positive 
E) inelastic; zero 
A) elastic; positive 
B) elastic; negative 
C) inelastic; negative 
D) inelastic; positive 
E) inelastic; zero

Question 15

Perfectly competitive firms and monopolist firms both maximize profit where

Accepted Answer

A) price equals marginal cost 
B) total revenue is maximized 
C) average total cost is minimized 
D) marginal cost equals marginal revenue 
E) price is as high as possible 
A) price equals marginal cost 
B) total revenue is maximized 
C) average total cost is minimized 
D) marginal cost equals marginal revenue 
E) price is as high as possible

Question 16

A monopolist has complete control over both price and quantity of output.

Accepted Answer

A) True 
 B)False

Question 17

The supply curve for a monopolist

Accepted Answer

A) is its marginal cost curve 
B) is vertical because there are no close substitutes for its product 
C) is horizontal because there are no close substitutes for its product 
D) slopes upward 
E) does not exist 
A) is its marginal cost curve 
B) is vertical because there are no close substitutes for its product 
C) is horizontal because there are no close substitutes for its product 
D) slopes upward 
E) does not exist

Question 18

A monopolist has no supply curve because

Accepted Answer

A) as demand changes, each output level can be consistent with more than one profit-maximizing price 
B) monopolists tend to restrict output 
C) monopolists have no marginal cost curve 
D) monopolists can charge any price they want 
E) as demand changes, the firm's profit-maximizing choice of output may change 
A) as demand changes, each output level can be consistent with more than one profit-maximizing price 
B) monopolists tend to restrict output 
C) monopolists have no marginal cost curve 
D) monopolists can charge any price they want 
E) as demand changes, the firm's profit-maximizing choice of output may change

Question 19

With perfect price discrimination, each consumer is charged the marginal value of each unit consumed.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 9-4   What is the revenue-maximizing output for the monopolist represented in Exhibit 9-4, assuming it does not price discriminate?

Accepted Answer

A) 0 units 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units 
A) 0 units 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units

Exam 9: A--Monopoly

Exhibit 9-3 At the profit-maximizing output for the firm in Exhibit 9-3, the single price monopolist will charge _____ per unit of output.

Exhibit 9-18 The firm in Exhibit 9-18, the monopolist who charges the same price to all customers, will produce how many units of output?

Exhibit 9-2 In Exhibit 9-2, the average revenue of the fourth unit is

Suppose that the only maker of a particular type of horse hair clothing exits the industry because demand is too low.The correct analysis of this situation is that

On a graph, to determine the price a profit-maximizing monopolist would charge, find the quantity at which MC and MR intersect and read up to the demand curve.

Jewelers are willing to hold large inventories of diamonds

Exhibit 9-11 If the monopolist in Exhibit 9-11 chooses to produce 1, 000 units and does not price discriminate, its profit will be

Exhibit 9-5 The total revenue for the nondiscriminating monopolist at its profit-maximizing quantity in Exhibit 9-5 is

Unlike firms in a perfectly competitive industry, monopolists have control over

The practice of charging different prices to different consumers of the same product is called

Average revenue, demand, and price are all depicted by the same curve for a monopoly.

Exhibit 9-3 The total cost for the firm in Exhibit 9-3, a monopolist that maximizes profit while charging all customers the same price, is

Price discrimination will occur whenever a firm faces a downward-sloping demand curve.

A profit-maximizing monopolist never produces along the __________ portion of the demand curve because marginal revenue is __________ there.

Perfectly competitive firms and monopolist firms both maximize profit where

A monopolist has complete control over both price and quantity of output.

The supply curve for a monopolist

A monopolist has no supply curve because

With perfect price discrimination, each consumer is charged the marginal value of each unit consumed.

Exhibit 9-4 What is the revenue-maximizing output for the monopolist represented in Exhibit 9-4, assuming it does not price discriminate?

The Art and Science of Economic Analysis

Appendix--Understanding Graphs

Economic Tools and Economics Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Appendix--Price Elasticity and Tax Incidence

Consumer Choice and Demand

Appendix--Indifference Curves and Utility Maximization

Production and Cost in the Firm

A--Perfect Competition

B--Perfect Competition

B--Monopoly

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, and Corporate Finance

Transaction Costs, Imperfect Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Income Distribution and Poverty

International Trade

International Finance

Economic Development

Filters

A profit-maximizing monopolist never produces along the portion of the demand curve because marginal revenue is there.