Question 1

Suppose a monopoly can separate its customers into two groups.If the monopoly practices price discrimination,it will charge the lower price to the group with:

Accepted Answer

A) the higher price elasticity of demand. 
B) the lower price elasticity of demand. 
C) the fewer close substitutes. 
D) The answer cannot be determined with the information given. 
A) the higher price elasticity of demand. 
B) the lower price elasticity of demand. 
C) the fewer close substitutes. 
D) The answer cannot be determined with the information given.

Question 2

Use the following to answer question:
Figure: Computing Monopoly Profit  
-(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.Producing at point N would:

Accepted Answer

A) result in MR = MC. 
B) result in positive economic profits. 
C) never be profit-maximizing since,at this output,MR  0. 
D) result in the firm breaking even. 
A) result in MR = MC. 
B) result in positive economic profits. 
C) never be profit-maximizing since,at this output,MR  0. 
D) result in the firm breaking even.

Question 3

In an industry characterized by extensive economies of scale:

Accepted Answer

A) small companies are more profitable than are large companies. 
B) large companies are more profitable than are small companies. 
C) small and large companies are equally profitable. 
D) small companies will drive out large companies. 
A) small companies are more profitable than are large companies. 
B) large companies are more profitable than are small companies. 
C) small and large companies are equally profitable. 
D) small companies will drive out large companies.

Question 4

Use the following to answer question:  
-(Table: Demand for Lenny's Coffee)Use Table: Demand for Lenny's Coffee.Lenny's Café is the only source of coffee for hundreds of miles in any direction.If Lenny's marginal cost of selling coffee is a constant $2 and he has no fixed costs,and the government forces Lenny to charge a price that eliminates deadweight loss,Lenny will charge _____ per cup and sell _____ cups.

Accepted Answer

A) $0;10 
B) $2;8 
C) $4;6 
D) $5;5 
A) $0;10 
B) $2;8 
C) $4;6 
D) $5;5

Question 5

When a monopolist practices price discrimination,compared with a single-price monopolist,monopoly profits will:

Accepted Answer

A) remain the same. 
B) increase. 
C) decrease. 
D) increase initially and then return to their original level. 
A) remain the same. 
B) increase. 
C) decrease. 
D) increase initially and then return to their original level.

Question 6

The natural monopoly:

Accepted Answer

A) would incur an economic profit if regulated to produce where price is less than marginal cost. 
B) would incur an economic profit if regulated to charge a price equal to average total cost. 
C) generates more consumer surplus than would an unregulated monopolist if regulated to produce where price equals average total cost. 
D) generates more consumer surplus than would an unregulated monopolist if regulated to produce where marginal cost equals marginal revenue. 
A) would incur an economic profit if regulated to produce where price is less than marginal cost. 
B) would incur an economic profit if regulated to charge a price equal to average total cost. 
C) generates more consumer surplus than would an unregulated monopolist if regulated to produce where price equals average total cost. 
D) generates more consumer surplus than would an unregulated monopolist if regulated to produce where marginal cost equals marginal revenue.

Question 7

One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a _____ demand curve,while the purely competitive firm has a _____ demand curve.

Accepted Answer

A) downward-sloping;perfectly elastic 
B) perfectly inelastic;perfectly elastic 
C) downward-sloping;perfectly inelastic 
D) perfectly elastic;downward-sloping 
A) downward-sloping;perfectly elastic 
B) perfectly inelastic;perfectly elastic 
C) downward-sloping;perfectly inelastic 
D) perfectly elastic;downward-sloping

Question 8

Public policies toward monopoly in the United States often consist of:

Accepted Answer

A) laws outlawing all of them. 
B) the regulation of natural monopolies. 
C) government takeover if monopoly profit exceeds a certain level. 
D) forcing monopoly industries to become perfectly competitive. 
A) laws outlawing all of them. 
B) the regulation of natural monopolies. 
C) government takeover if monopoly profit exceeds a certain level. 
D) forcing monopoly industries to become perfectly competitive.

Question 9

The demand curve for a monopoly is:

Accepted Answer

A) the sum of the supply curves of all of the firms in the monopoly's industry. 
B) the industry demand curve. 
C) horizontal because no one can enter. 
D) perfectly elastic. 
A) the sum of the supply curves of all of the firms in the monopoly's industry. 
B) the industry demand curve. 
C) horizontal because no one can enter. 
D) perfectly elastic.

Question 10

Network externalities exist when a good's value to the consumer rises as:

Accepted Answer

A) the number of people who use the good increases. 
B) the number of people who use the good decreases. 
C) the number of people who use the good remains constant. 
D) technology improves. 
A) the number of people who use the good increases. 
B) the number of people who use the good decreases. 
C) the number of people who use the good remains constant. 
D) technology improves.

Question 11

A monopoly's short-run marginal cost is constant at $10.This implies that its average variable cost is also constant and equal to $10.

Accepted Answer

A) True 
 B)False

Question 12

Use the following to answer question:
Figure: The Monopolist  
-(Scenario: Monopolist)Use Scenario: Monopolist.The profit-maximizing output is _____ units,and the profit-maximizing price is _____. Scenario: Monopolist
The demand curve for a monopolist is P = 75 - 0.5Q,and the monopolist's marginal cost curve is defined using the equation MC = 2Q.Assume also that ATC at the profit-maximizing level of production is equal to $12.50.

Accepted Answer

A) 25;$75.00 
B) 20;$62.50 
C) 25;$75.50 
D) 25;$62.50 
A) 25;$75.00 
B) 20;$62.50 
C) 25;$75.50 
D) 25;$62.50

Question 13

In general,economists are critical of monopoly where there is/are:

Accepted Answer

A) no natural monopoly. 
B) a natural monopoly. 
C) only a few firms. 
D) persistent economies of scale. 
A) no natural monopoly. 
B) a natural monopoly. 
C) only a few firms. 
D) persistent economies of scale.

Question 14

A price-discriminating firm will adjust prices so that customers with more _____ demand pay _____ customers with _____ elastic demand.

Accepted Answer

A) inelastic;less than;less 
B) elastic;less than;less 
C) elastic;the same as;more 
D) elastic;more than;less 
A) inelastic;less than;less 
B) elastic;less than;less 
C) elastic;the same as;more 
D) elastic;more than;less

Question 15

A monopolist with a linear demand curve will:

Accepted Answer

A) not produce in the inelastic portion of its demand curve. 
B) produce regardless of elasticity,since it is a monopolist. 
C) not produce in the elastic portion of its demand curve. 
D) produce only at the unit price-elastic portion of its demand curve. 
A) not produce in the inelastic portion of its demand curve. 
B) produce regardless of elasticity,since it is a monopolist. 
C) not produce in the elastic portion of its demand curve. 
D) produce only at the unit price-elastic portion of its demand curve.

Question 16

Use the following to answer question:  
-(Table: Prices and Demand)Use Table: Prices and Demand.The New Orleans Saints have a monopoly on Saints logo hats.The marginal cost of producing a hat is $18.How much is consumer surplus at the Saint's profit-maximizing output?

Accepted Answer

A) $24 
B) $18 
C) $12 
D) $9 
A) $24 
B) $18 
C) $12 
D) $9

Question 17

Use the following to answer question:
Figure: Computing Monopoly Profit  
-(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.The profit-maximizing price is _____ and will generate total economic profit of _____.

Accepted Answer

A) P2;EF 
B) P3;the rectangle P1P2FG 
C) P3;the rectangle P2P3EF 
D) P3;EF 
A) P2;EF 
B) P3;the rectangle P1P2FG 
C) P3;the rectangle P2P3EF 
D) P3;EF

Question 18

(Figure: The Monopolist IV)Use Figure: The Monopolist IV.Assume this monopolist has no fixed costs.If this monopolist profit-maximizes,it will produce _____ units and charge a price equal to _____.Its profit will be _____,its consumer surplus will be _____,and the deadweight loss is _____. Figure: The Monopolist IV

Accepted Answer

A) 50;$30;$1,200;$600;$100 
B) 35;$65;$1,225;$612.50;$612.50 
C) 100;$65;$1,500;$615.50;$1,000 
D) 70;$35;$1,225;$615.50;$615.50 
A) 50;$30;$1,200;$600;$100 
B) 35;$65;$1,225;$612.50;$612.50 
C) 100;$65;$1,500;$615.50;$1,000 
D) 70;$35;$1,225;$615.50;$615.50

Question 19

A firm that can price-discriminate should adjust prices so that customers with _____ demand pay _____ prices than/as do those with _____ demand.

Accepted Answer

A) price-inelastic;lower;elastic 
B) price-inelastic;the same;elastic 
C) price-elastic;lower;inelastic 
D) price-elastic;higher;inelastic 
A) price-inelastic;lower;elastic 
B) price-inelastic;the same;elastic 
C) price-elastic;lower;inelastic 
D) price-elastic;higher;inelastic

Question 20

When a monopolist practices price discrimination as opposed to setting a single price,efficiency decreases.

Accepted Answer

A) True 
 B)False

Suppose a monopoly can separate its customers into two groups.If the monopoly practices price discrimination,it will charge the lower price to the group with:

Use the following to answer question: Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.Producing at point N would:

In an industry characterized by extensive economies of scale:

When a monopolist practices price discrimination,compared with a single-price monopolist,monopoly profits will:

The natural monopoly:

One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a _ demand curve,while the purely competitive firm has a _ demand curve.

Public policies toward monopoly in the United States often consist of:

The demand curve for a monopoly is:

Network externalities exist when a good's value to the consumer rises as:

A monopoly's short-run marginal cost is constant at $10.This implies that its average variable cost is also constant and equal to $10.

In general,economists are critical of monopoly where there is/are:

A price-discriminating firm will adjust prices so that customers with more ___ demand pay _ customers with ___ elastic demand.

A monopolist with a linear demand curve will:

Use the following to answer question: -(Table: Prices and Demand)Use Table: Prices and Demand.The New Orleans Saints have a monopoly on Saints logo hats.The marginal cost of producing a hat is $18.How much is consumer surplus at the Saint's profit-maximizing output?

Use the following to answer question: Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.The profit-maximizing price is _ and will generate total economic profit of _.

(Figure: The Monopolist IV)Use Figure: The Monopolist IV.Assume this monopolist has no fixed costs.If this monopolist profit-maximizes,it will produce ___ units and charge a price equal to _.Its profit will be _,its consumer surplus will be _,and the deadweight loss is ___. Figure: The Monopolist IV

A firm that can price-discriminate should adjust prices so that customers with ___ demand pay _ prices than/as do those with ___ demand.

When a monopolist practices price discrimination as opposed to setting a single price,efficiency decreases.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

Exam 13: Monopoly

Suppose a monopoly can separate its customers into two groups.If the monopoly practices price discrimination,it will charge the lower price to the group with:

Use the following to answer question: Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.Producing at point N would:

In an industry characterized by extensive economies of scale:

When a monopolist practices price discrimination,compared with a single-price monopolist,monopoly profits will:

The natural monopoly:

One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a _____ demand curve,while the purely competitive firm has a _____ demand curve.

Public policies toward monopoly in the United States often consist of:

The demand curve for a monopoly is:

Network externalities exist when a good's value to the consumer rises as:

A monopoly's short-run marginal cost is constant at $10.This implies that its average variable cost is also constant and equal to $10.

In general,economists are critical of monopoly where there is/are:

A price-discriminating firm will adjust prices so that customers with more _____ demand pay _____ customers with _____ elastic demand.

A monopolist with a linear demand curve will:

Use the following to answer question: -(Table: Prices and Demand)Use Table: Prices and Demand.The New Orleans Saints have a monopoly on Saints logo hats.The marginal cost of producing a hat is $18.How much is consumer surplus at the Saint's profit-maximizing output?

Use the following to answer question: Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.The profit-maximizing price is _____ and will generate total economic profit of _____.

A firm that can price-discriminate should adjust prices so that customers with _____ demand pay _____ prices than/as do those with _____ demand.

When a monopolist practices price discrimination as opposed to setting a single price,efficiency decreases.

First Principles

Economic Models: Trade-Offs and Trade

Consumer and Producer Surplus

Supply and Demand

Price Controls and Quotas: Meddling With Markets

Elasticity

Taxes

International Trade

Decision Making by Individuals and Firms

The Rational Consumer

Behind the Supply Curve: Inputs and Costs

Perfect Competition and the Supply Curve

Oligopoly

Monopolistic Competition and Product Differentiation

Externalities

Public Goods and Common Resources

The Economics of the Welfare State

Factor Markets and the Distribution of Income

Uncertainty, Risk, and Private Information

Graphs in Economics

Consumer Preferences and Consumer Choice

Filters

One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a _ demand curve,while the purely competitive firm has a _ demand curve.

A price-discriminating firm will adjust prices so that customers with more ___ demand pay _ customers with ___ elastic demand.

Use the following to answer question: Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit)Use Figure: Computing Monopoly Profit.The profit-maximizing price is _ and will generate total economic profit of _.

A firm that can price-discriminate should adjust prices so that customers with ___ demand pay _ prices than/as do those with ___ demand.