Question 1

A monopolist who engages in perfect price discrimination charges each consumer a price equal to that consumer's willingness to pay.

Accepted Answer

A) True 
 B)False

Question 2

A monopoly may continue to make economic profits in the long run because of the barriers to entry in its industry.

Accepted Answer

A) True 
 B)False

Question 3

When regulating a natural monopoly,the government always sets a price ceiling where marginal cost intersects the demand curve.

Accepted Answer

A) True 
 B)False

Question 4

When firms price-discriminate,people with _____ price elasticity of demand will pay _____ prices relative to those purchasing the same product who have a _____ price elasticity of demand.

Accepted Answer

A) higher;higher;lower 
B) lower;lower;higher 
C) lower;higher;higher 
D) higher;the same;lower 
A) higher;higher;lower 
B) lower;lower;higher 
C) lower;higher;higher 
D) higher;the same;lower

Question 5

Critics of the National Collegiate Athletic Association (NCAA)argue that the NCAA monopolizes college athletics and prevents student athletes from earning money while in college.If this is true,what type of entry barrier does the NCAA have?

Accepted Answer

A) a patent 
B) a copyright 
C) control of a scarce resource or input 
D) economies of scale 
A) a patent 
B) a copyright 
C) control of a scarce resource or input 
D) economies of scale

Question 6

An oligopoly that engages in price discrimination will charge higher prices to customers with the most elastic demand.

Accepted Answer

A) True 
 B)False

Question 7

Lenoia runs a natural monopoly producing electricity for a small mountain village.The barrier preventing other firms from competing with her is:

Accepted Answer

A) her control of scarce natural resources. 
B) the existence of economies of scale. 
C) her technological superiority. 
D) a government-set barrier. 
A) her control of scarce natural resources. 
B) the existence of economies of scale. 
C) her technological superiority. 
D) a government-set barrier.

Question 8

For a monopolist to practice price discrimination successfully,its customers must all have the same willingness to pay for the good.

Accepted Answer

A) True 
 B)False

Question 9

In 1999,a judge declared that Microsoft was a monopolist.Assuming that Microsoft has a linear demand curve and that it is maximizing its profits at its current level of output,we may conclude that,if Microsoft were to increase its price,its total revenue would:

Accepted Answer

A) rise. 
B) fall. 
C) remain unchanged. 
D) There is insufficient information to make a determination. 
A) rise. 
B) fall. 
C) remain unchanged. 
D) There is insufficient information to make a determination.

Question 10

Which statement is NOT an example of price discrimination?

Accepted Answer

A) Students receive a discount at the ice cream store when they show their college ID cards. 
B) Women receive free admission to a nightclub,while men must pay a cover charge. 
C) A country club requires members to pay annual dues,but members receive discounted prices to golf (relative to nonmembers). 
D) Street vendors increase the price of umbrellas when it is raining. 
A) Students receive a discount at the ice cream store when they show their college ID cards. 
B) Women receive free admission to a nightclub,while men must pay a cover charge. 
C) A country club requires members to pay annual dues,but members receive discounted prices to golf (relative to nonmembers). 
D) Street vendors increase the price of umbrellas when it is raining.

Question 11

Use the following to answer question:
Figure: The Profit-Maximizing Output and Price  
-(Figure: The Profit-Maximizing Output and Price)Use Figure: The Profit-Maximizing Output and Price.Assume there are no fixed costs and AC = MC.At the profit-maximizing quantity of production for the monopolist,total revenue is _____,total cost is _____,and profit is _____.

Accepted Answer

A) $600;$200;$400 
B) $1,600;$3,200;$1,600 
C) $4,800;$3,200;$1,600 
D) $4,800;$1,600;$3,200 
A) $600;$200;$400 
B) $1,600;$3,200;$1,600 
C) $4,800;$3,200;$1,600 
D) $4,800;$1,600;$3,200

Question 12

Although price discrimination never occurs in perfect competition,it may occur in monopolistic competition.

Accepted Answer

A) True 
 B)False

Question 13

To maintain profits in the long run,a monopoly must be protected by barriers to the entry of other firms into the industry.

Accepted Answer

A) True 
 B)False

Question 14

Use the following to answer question:
Figure: PPV  
-(Figure: PPV)Use Figure: PPV.The figure shows the demand and marginal revenue for a pay-per-view football game on cable TV.Assume that the marginal cost and average cost are a constant $20.If the cable company is a monopoly,how much deadweight loss is there when the monopolist maximizes profit?

Accepted Answer

A) $0 
B) $20 
C) $80 
D) $160 
A) $0 
B) $20 
C) $80 
D) $160

Question 15

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 baseball hats.The Saints sell at most 1 hat to each customer,and the table shows each customer's willingness to pay.The marginal cost of producing a hat is $18,and there are no fixed costs.How much is the Saints' profit at the profit-maximizing output?

Accepted Answer

A) $24 
B) $18 
C) $12 
D) $30 
A) $24 
B) $18 
C) $12 
D) $30

Question 16

In perfect price discrimination,consumer surplus is larger than it is in a single-price monopoly.

Accepted Answer

A) True 
 B)False

Question 17

A monopolist generally _____ than does a perfectly competitive industry with the same market demand.

Accepted Answer

A) produces a larger quantity 
B) charges a higher price 
C) charges a lower price 
D) earns less profit in the long run 
A) produces a larger quantity 
B) charges a higher price 
C) charges a lower price 
D) earns less profit in the long run

A monopolist who engages in perfect price discrimination charges each consumer a price equal to that consumer's willingness to pay.

A monopoly may continue to make economic profits in the long run because of the barriers to entry in its industry.

When regulating a natural monopoly,the government always sets a price ceiling where marginal cost intersects the demand curve.

When firms price-discriminate,people with ___ price elasticity of demand will pay _ prices relative to those purchasing the same product who have a ___ price elasticity of demand.

Critics of the National Collegiate Athletic Association (NCAA)argue that the NCAA monopolizes college athletics and prevents student athletes from earning money while in college.If this is true,what type of entry barrier does the NCAA have?

An oligopoly that engages in price discrimination will charge higher prices to customers with the most elastic demand.

Lenoia runs a natural monopoly producing electricity for a small mountain village.The barrier preventing other firms from competing with her is:

For a monopolist to practice price discrimination successfully,its customers must all have the same willingness to pay for the good.

In 1999,a judge declared that Microsoft was a monopolist.Assuming that Microsoft has a linear demand curve and that it is maximizing its profits at its current level of output,we may conclude that,if Microsoft were to increase its price,its total revenue would:

Which statement is NOT an example of price discrimination?

Although price discrimination never occurs in perfect competition,it may occur in monopolistic competition.

To maintain profits in the long run,a monopoly must be protected by barriers to the entry of other firms into the industry.

In perfect price discrimination,consumer surplus is larger than it is in a single-price monopoly.

A monopolist generally _____ than does a perfectly competitive industry with the same market demand.

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

A monopolist who engages in perfect price discrimination charges each consumer a price equal to that consumer's willingness to pay.

A monopoly may continue to make economic profits in the long run because of the barriers to entry in its industry.

When regulating a natural monopoly,the government always sets a price ceiling where marginal cost intersects the demand curve.

When firms price-discriminate,people with _____ price elasticity of demand will pay _____ prices relative to those purchasing the same product who have a _____ price elasticity of demand.

Critics of the National Collegiate Athletic Association (NCAA)argue that the NCAA monopolizes college athletics and prevents student athletes from earning money while in college.If this is true,what type of entry barrier does the NCAA have?

An oligopoly that engages in price discrimination will charge higher prices to customers with the most elastic demand.

Lenoia runs a natural monopoly producing electricity for a small mountain village.The barrier preventing other firms from competing with her is:

For a monopolist to practice price discrimination successfully,its customers must all have the same willingness to pay for the good.

In 1999,a judge declared that Microsoft was a monopolist.Assuming that Microsoft has a linear demand curve and that it is maximizing its profits at its current level of output,we may conclude that,if Microsoft were to increase its price,its total revenue would:

Which statement is NOT an example of price discrimination?

Although price discrimination never occurs in perfect competition,it may occur in monopolistic competition.

To maintain profits in the long run,a monopoly must be protected by barriers to the entry of other firms into the industry.

In perfect price discrimination,consumer surplus is larger than it is in a single-price monopoly.

A monopolist generally _____ than does a perfectly competitive industry with the same market demand.

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

When firms price-discriminate,people with ___ price elasticity of demand will pay _ prices relative to those purchasing the same product who have a ___ price elasticity of demand.