Question 1

For a monopolist,if total revenue increases as output decreases,then marginal revenue is:

Accepted Answer

A) equal to price. 
B) zero. 
C) positive. 
D) negative. 
A) equal to price. 
B) zero. 
C) positive. 
D) negative.

Question 2

-Refer to Figure 10.4.The Exclusive Gift Company has a monopoly over the sale of gold hula hoops.This company is currently selling 50 gold hula hoops at a price of $5,000.You are hired as an economic consultant to this company.You should advise this monopolist to:

Accepted Answer

A) shut down in the short run and exit the industry in the long run. 
B) produce in the short run and expand capacity in the long run. 
C) produce in the short run but exit the industry in the long run if conditions do not change. 
D) shut down in the short run but expand capacity in the long run if conditions do not change. 
A) shut down in the short run and exit the industry in the long run. 
B) produce in the short run and expand capacity in the long run. 
C) produce in the short run but exit the industry in the long run if conditions do not change. 
D) shut down in the short run but expand capacity in the long run if conditions do not change.

Question 3

Compared to a monopoly market,a perfectly competitive market will produce more output at a higher price.

Accepted Answer

A) True 
 B)False

Question 4

Recall the application about drug companies behaving illegally to protect their patented drugs.Why would a company owning a drug patent that is about to expire pay a competitor $60 million to NOT produce a comparable drug?

Accepted Answer

A) They claim their patented drug is a superior product. 
B) They want to avoid losing profits. 
C) They want consumers to have some alternatives. 
D) No company would ever spend money in that manner. 
A) They claim their patented drug is a superior product. 
B) They want to avoid losing profits. 
C) They want consumers to have some alternatives. 
D) No company would ever spend money in that manner.

Question 5

When the firm is producing at the monopoly equilibrium,its producer surplus will be ________ and the consumer surplus will be ________ than if the industry was competitive.

Accepted Answer

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

Question 6

-Refer to Figure 10.8.If the paper books industry becomes monopolized,the profit-maximizing price will be ________ and the profit-maximizing quantity will be ________ units.

Accepted Answer

A) $25;600 
B) $23;400 
C) $20;800 
D) $10;400 
A) $25;600 
B) $23;400 
C) $20;800 
D) $10;400

Question 7

For effective price discrimination,the firm must ensure that the product is able to be resold.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) is $10,000. 
B) is $20,000. 
C) is $40,000. 
D) is $50,000. 
A) is $10,000. 
B) is $20,000. 
C) is $40,000. 
D) is $50,000.

Question 9

If you buy a 1 gallon paint and the manufacturer gives you $5 dollars off mail in rebate and you mail the receipt to claim the rebate.You are not willing to pay as much as the typical consumer.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a result of the monopolization of a perfectly competitive industry,ceteris paribus?

Accepted Answer

A) lower prices 
B) greater efficiency 
C) reduced profits 
D) deadweight loss 
A) lower prices 
B) greater efficiency 
C) reduced profits 
D) deadweight loss

Question 11

The Rare Bird Company has a monopoly in the sale of macaws in Iowa.When the Rare Bird Company sells three macaws its marginal revenue is $30.When the Rare Bird Company sells four macaws its marginal revenue will be:

Accepted Answer

A) less than $30. 
B) greater than $30. 
C) equal to $30. 
D) greater than $30 if demand is elastic and less than $30 if demand is inelastic. 
A) less than $30. 
B) greater than $30. 
C) equal to $30. 
D) greater than $30 if demand is elastic and less than $30 if demand is inelastic.

Question 12

Provide three examples of price discrimination.

Accepted Answer

Student responses will vary bu

Question 13

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

Accepted Answer

A) $2. 
B) $1. 
C) $5. 
D) $25. 
A) $2. 
B) $1. 
C) $5. 
D) $25.

Question 14

In order for a monopoly to maximize its profit,the monopoly will produce the quantity at which marginal revenue is less than marginal cost.

Accepted Answer

A) True 
 B)False

Question 15

A firm can effectively practice price discrimination and increase profit if:

Accepted Answer

A) the marginal cost of production in each market is different. 
B) the average cost of production in each market is different. 
C) the price elasticity of demand in each market is different. 
D) the product can be produced in two different factories. 
A) the marginal cost of production in each market is different. 
B) the average cost of production in each market is different. 
C) the price elasticity of demand in each market is different. 
D) the product can be produced in two different factories.

Question 16

Table 10.1
-Table 10.1 represents the demand for Widgets,Inc. ,which has a monopoly in the sale of widgets.Calculate total revenue and marginal revenue for the levels of output given.

Accepted Answer

The answer of   Table 10.1
-Table 10.1 represents the...

Question 17

A Colombian emerald mine has a monopoly over the production of emeralds in Colombia.The mine will find it profitable to increase the mining production of emeralds as long as marginal cost:

Accepted Answer

A) is less than marginal revenue. 
B) equals marginal revenue. 
C) is greater than marginal revenue. 
D) is positive. 
A) is less than marginal revenue. 
B) equals marginal revenue. 
C) is greater than marginal revenue. 
D) is positive.

Question 18

Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit?

Accepted Answer

A) Price equals marginal costs. 
B) Marginal revenue is less than price. 
C) Marginal revenue is equal to marginal cost. 
D) all of the above 
A) Price equals marginal costs. 
B) Marginal revenue is less than price. 
C) Marginal revenue is equal to marginal cost. 
D) all of the above

Question 19

Deadweight loss from monopoly is:

Accepted Answer

A) the net decrease in the market surplus. 
B) the producer surplus loss only. 
C) the process of using public policy to reduce losses. 
D) the decrease in productivity. 
A) the net decrease in the market surplus. 
B) the producer surplus loss only. 
C) the process of using public policy to reduce losses. 
D) the decrease in productivity.

Question 20

Explain three different types of barriers to entry in monopoly.

Accepted Answer

Three types of barriers to entry are: go

For a monopolist,if total revenue increases as output decreases,then marginal revenue is:

-Refer to Figure 10.4.The Exclusive Gift Company has a monopoly over the sale of gold hula hoops.This company is currently selling 50 gold hula hoops at a price of $5,000.You are hired as an economic consultant to this company.You should advise this monopolist to:

Compared to a monopoly market,a perfectly competitive market will produce more output at a higher price.

Recall the application about drug companies behaving illegally to protect their patented drugs.Why would a company owning a drug patent that is about to expire pay a competitor $60 million to NOT produce a comparable drug?

When the firm is producing at the monopoly equilibrium,its producer surplus will be and the consumer surplus will be than if the industry was competitive.

-Refer to Figure 10.8.If the paper books industry becomes monopolized,the profit-maximizing price will be and the profit-maximizing quantity will be units.

For effective price discrimination,the firm must ensure that the product is able to be resold.

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

If you buy a 1 gallon paint and the manufacturer gives you $5 dollars off mail in rebate and you mail the receipt to claim the rebate.You are not willing to pay as much as the typical consumer.

Which of the following is a result of the monopolization of a perfectly competitive industry,ceteris paribus?

The Rare Bird Company has a monopoly in the sale of macaws in Iowa.When the Rare Bird Company sells three macaws its marginal revenue is $30.When the Rare Bird Company sells four macaws its marginal revenue will be:

Provide three examples of price discrimination.

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

In order for a monopoly to maximize its profit,the monopoly will produce the quantity at which marginal revenue is less than marginal cost.

A firm can effectively practice price discrimination and increase profit if:

Table 10.1 -Table 10.1 represents the demand for Widgets,Inc. ,which has a monopoly in the sale of widgets.Calculate total revenue and marginal revenue for the levels of output given.

A Colombian emerald mine has a monopoly over the production of emeralds in Colombia.The mine will find it profitable to increase the mining production of emeralds as long as marginal cost:

Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit?

Deadweight loss from monopoly is:

Explain three different types of barriers to entry in monopoly.

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

For a monopolist,if total revenue increases as output decreases,then marginal revenue is:

-Refer to Figure 10.4.The Exclusive Gift Company has a monopoly over the sale of gold hula hoops.This company is currently selling 50 gold hula hoops at a price of $5,000.You are hired as an economic consultant to this company.You should advise this monopolist to:

Compared to a monopoly market,a perfectly competitive market will produce more output at a higher price.

Recall the application about drug companies behaving illegally to protect their patented drugs.Why would a company owning a drug patent that is about to expire pay a competitor $60 million to NOT produce a comparable drug?

When the firm is producing at the monopoly equilibrium,its producer surplus will be ________ and the consumer surplus will be ________ than if the industry was competitive.

-Refer to Figure 10.8.If the paper books industry becomes monopolized,the profit-maximizing price will be ________ and the profit-maximizing quantity will be ________ units.

For effective price discrimination,the firm must ensure that the product is able to be resold.

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

If you buy a 1 gallon paint and the manufacturer gives you $5 dollars off mail in rebate and you mail the receipt to claim the rebate.You are not willing to pay as much as the typical consumer.

Which of the following is a result of the monopolization of a perfectly competitive industry,ceteris paribus?

The Rare Bird Company has a monopoly in the sale of macaws in Iowa.When the Rare Bird Company sells three macaws its marginal revenue is $30.When the Rare Bird Company sells four macaws its marginal revenue will be:

Provide three examples of price discrimination.

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

In order for a monopoly to maximize its profit,the monopoly will produce the quantity at which marginal revenue is less than marginal cost.

A firm can effectively practice price discrimination and increase profit if:

Table 10.1 -Table 10.1 represents the demand for Widgets,Inc. ,which has a monopoly in the sale of widgets.Calculate total revenue and marginal revenue for the levels of output given.

A Colombian emerald mine has a monopoly over the production of emeralds in Colombia.The mine will find it profitable to increase the mining production of emeralds as long as marginal cost:

Which of the following is true for both a monopolist and a perfectly competitive firm when each is maximizing profit?

Deadweight loss from monopoly is:

Explain three different types of barriers to entry in monopoly.

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

When the firm is producing at the monopoly equilibrium,its producer surplus will be and the consumer surplus will be than if the industry was competitive.

-Refer to Figure 10.8.If the paper books industry becomes monopolized,the profit-maximizing price will be and the profit-maximizing quantity will be units.