Question 1

In a monopoly in the long run:

Accepted Answer

A) economic profits will be eliminated by the entry of rival firms. 
B) economic profits will be reduced but not eliminated by the entry of rival firms. 
C) entry by other firms will not occur. 
D) the price will be the same as if the market were perfectly competitive. 
A) economic profits will be eliminated by the entry of rival firms. 
B) economic profits will be reduced but not eliminated by the entry of rival firms. 
C) entry by other firms will not occur. 
D) the price will be the same as if the market were perfectly competitive.

Question 2

The practice of charging different prices to different customers for the same good or service,even though the cost of supplying those customers is the same,is:

Accepted Answer

A) privatization. 
B) monopolization. 
C) output competition. 
D) price discrimination. 
A) privatization. 
B) monopolization. 
C) output competition. 
D) price discrimination.

Question 3

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 that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,deadweight loss is:

Accepted Answer

A) $3,200. 
B) $6,400. 
C) $1,000. 
D) $1,600. 
A) $3,200. 
B) $6,400. 
C) $1,000. 
D) $1,600.

Question 4

(Scenario: A Small-Town Monopolist)Use Scenario: A Small-Town Monopolist.Compared with charging a single price,the deadweight loss: Scenario: A Small-Town Monopolist
A monopolist sells cable subscriptions in a small town and finds that it can sell 100 subscriptions when the price is $15 a week and 175 subscriptions when the price is $10 a week.The MC for the provision of the cable is $5 a week.There are no fixed costs.

Accepted Answer

A) increases when this monopolist price-discriminates. 
B) decreases when this monopolist price-discriminates. 
C) stays the same when this monopolist price-discriminates. 
D) is equal to zero. 
A) increases when this monopolist price-discriminates. 
B) decreases when this monopolist price-discriminates. 
C) stays the same when this monopolist price-discriminates. 
D) is equal to zero.

Question 5

If a monopolist is producing a quantity that generates MC > MR,then profit:

Accepted Answer

A) is maximized. 
B) is maximized only if MC = P. 
C) can be increased by increasing price. 
D) can be increased by decreasing price. 
A) is maximized. 
B) is maximized only if MC = P. 
C) can be increased by increasing price. 
D) can be increased by decreasing price.

Question 6

Use the following to answer question:  
-(Table: Lunch)Use Table: Lunch.This table shows market demand for picnic lunches for people taking all-day rafting trips on the river.Joe has a firm providing this service,and his marginal cost and average cost for each lunch are a constant $4.If Joe is a monopolist,what price will he charge for a lunch in the long run?

Accepted Answer

A) $9 
B) $7 
C) $5 
D) $3 
A) $9 
B) $7 
C) $5 
D) $3

Question 7

The municipal swimming pool charges lower entrance fees to local residents than to nonresidents.Assuming that this pricing strategy increases the profits of the pool,we can conclude that nonresidents must have a _____ demand for swimming at the pool than do residents.

Accepted Answer

A) greater 
B) lower 
C) more elastic 
D) less elastic 
A) greater 
B) lower 
C) more elastic 
D) less elastic

Question 8

If you had an official license for the exclusive right to sell breakfast bagels in your community,your monopoly would result from:

Accepted Answer

A) control of a scarce resource or input. 
B) technological superiority. 
C) increasing returns to scale. 
D) government-set barriers. 
A) control of a scarce resource or input. 
B) technological superiority. 
C) increasing returns to scale. 
D) government-set barriers.

Question 9

You own a lemonade stand in a competitive market,and as such,you are a price-taking firm.Which event would MOST likely increase your market power?

Accepted Answer

A) The government abolishes the system of patents and copyrights. 
B) A booming economy increases the demand for lemonade and attracts entry into the market. 
C) The average total cost curve for firms in the industry becomes horizontal. 
D) You acquire exclusive rights to harvest lemons from all domestic citrus orchards. 
A) The government abolishes the system of patents and copyrights. 
B) A booming economy increases the demand for lemonade and attracts entry into the market. 
C) The average total cost curve for firms in the industry becomes horizontal. 
D) You acquire exclusive rights to harvest lemons from all domestic citrus orchards.

Question 10

When a monopolist practices price discrimination as opposed to setting a single price,the monopolist sells more and increases profits.

Accepted Answer

A) True 
 B)False

Question 11

Bob owns a trout farm with monopoly power in North Carolina.Bob's optimal output occurs where marginal revenue _____ marginal cost.Because of monopoly power,Bob's supply curve _____.

Accepted Answer

A) equals;does not exist 
B) exceeds;does not exist 
C) equals;is upward sloping 
D) exceeds;is perfectly inelastic 
A) equals;does not exist 
B) exceeds;does not exist 
C) equals;is upward sloping 
D) exceeds;is perfectly inelastic

Question 12

Use the following to answer question:
Figure: Monopoly Model  
-(Figure: Monopoly Model)Use Figure: Monopoly Model.When the firm is in equilibrium (that is,maximizing its economic profit),its profit is the area of rectangle:

Accepted Answer

A) SPDB. 
B) IPDH. 
C) ISBH. 
D) 0PDJ. 
A) SPDB. 
B) IPDH. 
C) ISBH. 
D) 0PDJ.

Question 13

A firm that faces a downward-sloping demand curve is a:

Accepted Answer

A) price setter. 
B) quantity minimizer. 
C) quantity taker. 
D) price taker. 
A) price setter. 
B) quantity minimizer. 
C) quantity taker. 
D) price taker.

Question 14

The De Beers company is described as a monopolist in the production of:

Accepted Answer

A) diamonds. 
B) software. 
C) oil. 
D) beer. 
A) diamonds. 
B) software. 
C) oil. 
D) beer.

Question 15

Control of a scarce resource or input,economies of scale,technological superiority,and government-set rules and regulations are forms of:

Accepted Answer

A) market structure. 
B) pricing behavior. 
C) barriers to entry. 
D) public policy. 
A) market structure. 
B) pricing behavior. 
C) barriers to entry. 
D) public policy.

Question 16

(Figure: The Monopolist III)Use Figure: The Monopolist III.If this monopolist perfectly price-discriminates,then it will produce _____ units.This will lead to producer surplus equal to _____,consumer surplus equal to _____,and a deadweight loss equal to _____. Figure: The Monopolist III

Accepted Answer

A) 70;$2,450;$0;$0 
B) 50;$1,225;$0;$0 
C) 35;$1,225;$612.50;$612.50 
D) 100;$1,500;$612.50;$612.50 
A) 70;$2,450;$0;$0 
B) 50;$1,225;$0;$0 
C) 35;$1,225;$612.50;$612.50 
D) 100;$1,500;$612.50;$612.50

Question 17

To engage in price discrimination,a firm must be:

Accepted Answer

A) a price taker. 
B) one of many firms in an industry. 
C) unable to identify consumers whose elasticities differ. 
D) a price setter and able to identify consumers whose elasticities differ. 
A) a price taker. 
B) one of many firms in an industry. 
C) unable to identify consumers whose elasticities differ. 
D) a price setter and able to identify consumers whose elasticities differ.

Question 18

When a natural monopoly is regulated to charge a price equal to average total cost,producer surplus decreases,but total surplus increases.

Accepted Answer

A) True 
 B)False

Question 19

Which statement is TRUE?

Accepted Answer

A) Profit-maximizing behavior occurs only in perfectly competitive markets. 
B) Additional units of a good should be produced as long as MR  MC. 
A) Profit-maximizing behavior occurs only in perfectly competitive markets. 
B) Additional units of a good should be produced as long as MR  MC.

Question 20

In contrast with perfect competition,a monopoly:

Accepted Answer

A) produces more at a lower price. 
B) produces where MR > MC. 
C) may have lower economic profits in the long run. 
D) produces less at a higher price. 
A) produces more at a lower price. 
B) produces where MR > MC. 
C) may have lower economic profits in the long run. 
D) produces less at a higher price.

In a monopoly in the long run:

The practice of charging different prices to different customers for the same good or service,even though the cost of supplying those customers is the same,is:

If a monopolist is producing a quantity that generates MC > MR,then profit:

The municipal swimming pool charges lower entrance fees to local residents than to nonresidents.Assuming that this pricing strategy increases the profits of the pool,we can conclude that nonresidents must have a _____ demand for swimming at the pool than do residents.

If you had an official license for the exclusive right to sell breakfast bagels in your community,your monopoly would result from:

You own a lemonade stand in a competitive market,and as such,you are a price-taking firm.Which event would MOST likely increase your market power?

When a monopolist practices price discrimination as opposed to setting a single price,the monopolist sells more and increases profits.

Bob owns a trout farm with monopoly power in North Carolina.Bob's optimal output occurs where marginal revenue _ marginal cost.Because of monopoly power,Bob's supply curve _.

Use the following to answer question: Figure: Monopoly Model -(Figure: Monopoly Model)Use Figure: Monopoly Model.When the firm is in equilibrium (that is,maximizing its economic profit),its profit is the area of rectangle:

A firm that faces a downward-sloping demand curve is a:

The De Beers company is described as a monopolist in the production of:

Control of a scarce resource or input,economies of scale,technological superiority,and government-set rules and regulations are forms of:

(Figure: The Monopolist III)Use Figure: The Monopolist III.If this monopolist perfectly price-discriminates,then it will produce ___ units.This will lead to producer surplus equal to _,consumer surplus equal to _,and a deadweight loss equal to ___. Figure: The Monopolist III

To engage in price discrimination,a firm must be:

When a natural monopoly is regulated to charge a price equal to average total cost,producer surplus decreases,but total surplus increases.

Which statement is TRUE?

In contrast with perfect competition,a monopoly:

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

In a monopoly in the long run:

The practice of charging different prices to different customers for the same good or service,even though the cost of supplying those customers is the same,is:

If a monopolist is producing a quantity that generates MC > MR,then profit:

The municipal swimming pool charges lower entrance fees to local residents than to nonresidents.Assuming that this pricing strategy increases the profits of the pool,we can conclude that nonresidents must have a _____ demand for swimming at the pool than do residents.

If you had an official license for the exclusive right to sell breakfast bagels in your community,your monopoly would result from:

You own a lemonade stand in a competitive market,and as such,you are a price-taking firm.Which event would MOST likely increase your market power?

When a monopolist practices price discrimination as opposed to setting a single price,the monopolist sells more and increases profits.

Bob owns a trout farm with monopoly power in North Carolina.Bob's optimal output occurs where marginal revenue _____ marginal cost.Because of monopoly power,Bob's supply curve _____.

Use the following to answer question: Figure: Monopoly Model -(Figure: Monopoly Model)Use Figure: Monopoly Model.When the firm is in equilibrium (that is,maximizing its economic profit),its profit is the area of rectangle:

A firm that faces a downward-sloping demand curve is a:

The De Beers company is described as a monopolist in the production of:

Control of a scarce resource or input,economies of scale,technological superiority,and government-set rules and regulations are forms of:

(Figure: The Monopolist III)Use Figure: The Monopolist III.If this monopolist perfectly price-discriminates,then it will produce _____ units.This will lead to producer surplus equal to _____,consumer surplus equal to _____,and a deadweight loss equal to _____. Figure: The Monopolist III

To engage in price discrimination,a firm must be:

When a natural monopoly is regulated to charge a price equal to average total cost,producer surplus decreases,but total surplus increases.

Which statement is TRUE?

In contrast with perfect competition,a monopoly:

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

Bob owns a trout farm with monopoly power in North Carolina.Bob's optimal output occurs where marginal revenue _ marginal cost.Because of monopoly power,Bob's supply curve _.

(Figure: The Monopolist III)Use Figure: The Monopolist III.If this monopolist perfectly price-discriminates,then it will produce ___ units.This will lead to producer surplus equal to _,consumer surplus equal to _,and a deadweight loss equal to ___. Figure: The Monopolist III