Question 1

-Figure 10.7 shows the demand and cost conditions for a monopolist.How large is the deadweight loss due to monopoly?

Accepted Answer

The monopolist produces 10 few

Question 2

-Refer to Figure 10.6.The profit-maximizing (or loss-minimizing)level of output:

Accepted Answer

A) is 10,000. 
B) is 0. 
C) is approximately 15,000. 
D) is approximately 25,000. 
A) is 10,000. 
B) is 0. 
C) is approximately 15,000. 
D) is approximately 25,000.

Question 3

-Refer to Figure 10.1.The marginal revenue of the sixth pound of cheese is:

Accepted Answer

A) -$4. 
B) -$1. 
C) $1. 
D) $4. 
A) -$4. 
B) -$1. 
C) $1. 
D) $4.

Question 4

Assume that Pura Water,a local monopoly water utility company,is currently selling 10,000 gallons per hour at a price of $0.10 per gallon.If Pura Water wants to sell 1000 gallons more,it will have to lower the price to $0.09 per gallon.The marginal revenue of the 10,001 is approximately:

Accepted Answer

A) -$99.91. 
B) $99.91. 
C) $9.91. 
D) -$999.91. 
A) -$99.91. 
B) $99.91. 
C) $9.91. 
D) -$999.91.

Question 5

Firms in perfectly competitive markets are able to price discriminate.

Accepted Answer

A) True 
 B)False

Question 6

-Figure 10.7 shows the demand and cost conditions for a monopolist.What is the firm's maximum profit?

Accepted Answer

The monopolist will produce 10

Question 7

Another source of inefficiency from a monopoly is the use of resources to acquire monopoly power.

Accepted Answer

A) True 
 B)False

Question 8

The government is not able to regulate the price that a monopolist charges because the price is set by the market.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following market changes would be expected to occur when a patent expires?

Accepted Answer

A) an increase in the market price 
B) an increase in generic products 
C) a decrease in industry output 
D) all of the above 
A) an increase in the market price 
B) an increase in generic products 
C) a decrease in industry output 
D) all of the above

Question 10

Recall the application about why movie popcorn costs so much,what happens with the high demander and low demanders if the movie theater were to lower the price of the popcorn from $4 to $0.10 and increase the admission from $10 to $12?

Accepted Answer

A) The low demander will still see the movie and buy popcorn. 
B) The high demander will see the movie and buy popcorn same as the low demander. 
C) The high demander will see the movie and buy popcorn and the low demander will not do either. 
D) The high demander will not see the movie and buy popcorn. 
A) The low demander will still see the movie and buy popcorn. 
B) The high demander will see the movie and buy popcorn same as the low demander. 
C) The high demander will see the movie and buy popcorn and the low demander will not do either. 
D) The high demander will not see the movie and buy popcorn.

Question 11

Suppose the widget industry is perfectly competitive and faces constant returns to scale.A monopoly purchases all widget producers in the market.List three ways in which the market outcome under monopoly will differ from the market outcome under perfect competition.

Accepted Answer

(1)The monopoly will produce less output

Question 12

Price discrimination is best described as a situation where a firm:

Accepted Answer

A) charges buyers an excessive price for its product. 
B) charges different prices to different groups of buyers. 
C) sells the same product for different prices from one year to another. 
D) acts as a price taker. 
A) charges buyers an excessive price for its product. 
B) charges different prices to different groups of buyers. 
C) sells the same product for different prices from one year to another. 
D) acts as a price taker.

Question 13

-Refer to Figure 10.6.At the profit-maximizing level of output,total cost:

Accepted Answer

A) is $10,000. 
B) is $20,000. 
C) is $30,000. 
D) is $50,000. 
A) is $10,000. 
B) is $20,000. 
C) is $30,000. 
D) is $50,000.

Question 14

Assume a non-price discriminating monopolist can sell 20 units of a good for 4.00 each and can sell 21 units of that good for $ 3.85 each.The marginal revenue of the 21st unit is:

Accepted Answer

A) $85. 
B) $ -85. 
C) $ .85. 
D) $ -.85. 
A) $85. 
B) $ -85. 
C) $ .85. 
D) $ -.85.

Question 15

In which of the following markets is price discrimination likely? Explain.
(a)Televisions
(b)Airline travel
(c)Wheat

Accepted Answer

The only market in which price discrimin

Question 16

A monopoly firm cannot affect the price therefore it is a price taker.

Accepted Answer

A) True 
 B)False

Question 17

The tradeoffs faced by a monopolist in cutting price to sell a larger quantity leads to marginal revenue being:

Accepted Answer

A) less than price. 
B) greater than price. 
C) equal to price. 
D) none of the above. 
A) less than price. 
B) greater than price. 
C) equal to price. 
D) none of the above.

Question 18

A monopolist can:

Accepted Answer

A) sell as much as he wants at the chosen price since he is the only seller. 
B) increase price only if he is willing to reduce output sold. 
C) increase the price of his output and still sell the same quantity. 
D) increase the price of his output and the quantity sold at the same time. 
A) sell as much as he wants at the chosen price since he is the only seller. 
B) increase price only if he is willing to reduce output sold. 
C) increase the price of his output and still sell the same quantity. 
D) increase the price of his output and the quantity sold at the same time.

Question 19

Price discrimination can be an effective way to increase a firm's profit if the price elasticity of demand is the same across all buyers the firm serves.

Accepted Answer

A) True 
 B)False

Question 20

Suppose we know that a monopolist is maximizing its profits.Which of the following must be true? The monopolist has:

Accepted Answer

A) maximized its total revenue. 
B) set price equal to its average cost. 
C) maximized the difference between marginal revenue and marginal cost. 
D) equated marginal revenue and marginal cost. 
A) maximized its total revenue. 
B) set price equal to its average cost. 
C) maximized the difference between marginal revenue and marginal cost. 
D) equated marginal revenue and marginal cost.

-Figure 10.7 shows the demand and cost conditions for a monopolist.How large is the deadweight loss due to monopoly?

-Refer to Figure 10.6.The profit-maximizing (or loss-minimizing)level of output:

-Refer to Figure 10.1.The marginal revenue of the sixth pound of cheese is:

Assume that Pura Water,a local monopoly water utility company,is currently selling 10,000 gallons per hour at a price of $0.10 per gallon.If Pura Water wants to sell 1000 gallons more,it will have to lower the price to $0.09 per gallon.The marginal revenue of the 10,001 is approximately:

Firms in perfectly competitive markets are able to price discriminate.

-Figure 10.7 shows the demand and cost conditions for a monopolist.What is the firm's maximum profit?

Another source of inefficiency from a monopoly is the use of resources to acquire monopoly power.

The government is not able to regulate the price that a monopolist charges because the price is set by the market.

Which of the following market changes would be expected to occur when a patent expires?

Recall the application about why movie popcorn costs so much,what happens with the high demander and low demanders if the movie theater were to lower the price of the popcorn from $4 to $0.10 and increase the admission from $10 to $12?

Suppose the widget industry is perfectly competitive and faces constant returns to scale.A monopoly purchases all widget producers in the market.List three ways in which the market outcome under monopoly will differ from the market outcome under perfect competition.

Price discrimination is best described as a situation where a firm:

-Refer to Figure 10.6.At the profit-maximizing level of output,total cost:

Assume a non-price discriminating monopolist can sell 20 units of a good for 4.00 each and can sell 21 units of that good for $ 3.85 each.The marginal revenue of the 21st unit is:

In which of the following markets is price discrimination likely? Explain. (a)Televisions (b)Airline travel (c)Wheat

A monopoly firm cannot affect the price therefore it is a price taker.

The tradeoffs faced by a monopolist in cutting price to sell a larger quantity leads to marginal revenue being:

A monopolist can:

Price discrimination can be an effective way to increase a firm's profit if the price elasticity of demand is the same across all buyers the firm serves.

Suppose we know that a monopolist is maximizing its profits.Which of the following must be true? The monopolist has:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters

Exam 10: Monopoly and Price Discrimination

-Figure 10.7 shows the demand and cost conditions for a monopolist.How large is the deadweight loss due to monopoly?

-Refer to Figure 10.6.The profit-maximizing (or loss-minimizing)level of output:

-Refer to Figure 10.1.The marginal revenue of the sixth pound of cheese is:

Assume that Pura Water,a local monopoly water utility company,is currently selling 10,000 gallons per hour at a price of $0.10 per gallon.If Pura Water wants to sell 1000 gallons more,it will have to lower the price to $0.09 per gallon.The marginal revenue of the 10,001 is approximately:

Firms in perfectly competitive markets are able to price discriminate.

-Figure 10.7 shows the demand and cost conditions for a monopolist.What is the firm's maximum profit?

Another source of inefficiency from a monopoly is the use of resources to acquire monopoly power.

The government is not able to regulate the price that a monopolist charges because the price is set by the market.

Which of the following market changes would be expected to occur when a patent expires?

Recall the application about why movie popcorn costs so much,what happens with the high demander and low demanders if the movie theater were to lower the price of the popcorn from $4 to $0.10 and increase the admission from $10 to $12?

Suppose the widget industry is perfectly competitive and faces constant returns to scale.A monopoly purchases all widget producers in the market.List three ways in which the market outcome under monopoly will differ from the market outcome under perfect competition.

Price discrimination is best described as a situation where a firm:

-Refer to Figure 10.6.At the profit-maximizing level of output,total cost:

Assume a non-price discriminating monopolist can sell 20 units of a good for 4.00 each and can sell 21 units of that good for $ 3.85 each.The marginal revenue of the 21st unit is:

In which of the following markets is price discrimination likely? Explain. (a)Televisions (b)Airline travel (c)Wheat

A monopoly firm cannot affect the price therefore it is a price taker.

The tradeoffs faced by a monopolist in cutting price to sell a larger quantity leads to marginal revenue being:

A monopolist can:

Price discrimination can be an effective way to increase a firm's profit if the price elasticity of demand is the same across all buyers the firm serves.

Suppose we know that a monopolist is maximizing its profits.Which of the following must be true? The monopolist has:

Introduction: What Is Economics

The Key Principles of Economics

Exchange and Markets

Demand, supply, and Market Equilibrium

Elasticity: a Measure of Responsiveness

Market Efficiency and Government Intervention

Consumer Choice: Utility Theory and Insights From Neuroscience

Production Technology and Cost

Perfect Competition

Market Entry and Monopolistic Competition

Oligopoly and Strategic Behavior

Controlling Market Power: Antitrust and Regulation

Imperfect Information: Adverse Selection and Moral Hazard

Public Goods and Public Choice

External Costs and Environmental Policy

The Labor Market and the Distribution of Income

International Trade and Public Policy

Filters