Question 1

Exhibit 24-9
  
-Refer to Exhibit 24-9.A single-price monopolist earns a total profit of __________ when it produces the profit maximizing level of output.

Accepted Answer

A)  $120 
B)  $110 
C)  $180 
D)  $80 
E)  $49 
A)  $120 
B)  $110 
C)  $180 
D)  $80 
E)  $49

Question 2

Which of the following is true at the level of output which maximizes profits for a perfectly price-discriminating monopolist?

Accepted Answer

A) P > MC. B) P < ATC. C) P < MC. D) a and b E) none of the above A) P > MC. B) P < ATC. C) P < MC. D) a and b E) none of the above

Question 3

When the monopoly firm sells two units of its product,it earns total revenue of $260 and it incurs a total cost of $210.If its marginal revenue for the second unit was $110,what was the marginal revenue of the first unit?

Accepted Answer

A)  $100 
B)  $150 
C)  $133 
D)  $220 
E)  There is not enough information to answer the question. 
A)  $100 
B)  $150 
C)  $133 
D)  $220 
E)  There is not enough information to answer the question.

Question 4

Exhibit 24-10
  
-Refer to Exhibit 24-10.The profit-maximizing single-price monopolist will produce which quantity of output?

Accepted Answer

A)  Q2 
B)  Q1 
C)  Q3 
D)  Q4 
E)  none of the above 
A)  Q2 
B)  Q1 
C)  Q3 
D)  Q4 
E)  none of the above

Question 5

If a firm has no variable costs,the profit-maximizing price is also the revenue-maximizing price.

Accepted Answer

A) True 
 B)False

Question 6

The perfectly price-discriminating monopolist achieves resource allocative efficiency,while the single-price monopolist does not.

Accepted Answer

A) True 
 B)False

Question 7

When a monopolist can perfectly price discriminate,it follows that

Accepted Answer

A)  price equals marginal revenue. 
B)  price equals marginal cost at the quantity of output it chooses to produce. 
C)  the monopolist is resource-allocative efficient. 
D)  b and c 
E)  a, b, and c 
A)  price equals marginal revenue. 
B)  price equals marginal cost at the quantity of output it chooses to produce. 
C)  the monopolist is resource-allocative efficient. 
D)  b and c 
E)  a, b, and c

Question 8

Rent seeking occurs when the seller charges

Accepted Answer

A)  different prices for the product it sells, and the price differences do not reflect cost differences. 
B)  the highest price each consumer would be willing to pay for the product rather than go without it. 
C)  a uniform price per unit for one specific quantity, a lower price for an additional quantity, and so on. 
D)  a and c 
E)  none of the above 
A)  different prices for the product it sells, and the price differences do not reflect cost differences. 
B)  the highest price each consumer would be willing to pay for the product rather than go without it. 
C)  a uniform price per unit for one specific quantity, a lower price for an additional quantity, and so on. 
D)  a and c 
E)  none of the above

Question 9

Suppose a monopolist practices perfect price discrimination.Its marginal revenue curve

Accepted Answer

A)  will lie below the demand curve. 
B)  will lie above the demand curve. 
C)  will coincide with the demand curve. 
D)  has no definite relationship with the demand curve. 
A)  will lie below the demand curve. 
B)  will lie above the demand curve. 
C)  will coincide with the demand curve. 
D)  has no definite relationship with the demand curve.

Question 10

Define price discrimination.What three conditions must exist before a firm can use it successfully?

Accepted Answer

Price discrimination occurs when a selle

Question 11

Rent-seeking is said to be socially wasteful because

Accepted Answer

A)  the rent seekers compete too fiercely with each other. 
B)  resources that are used to seek rents don't end up helping anyone in society. 
C)  the rent seekers usually end up spending too much to get what they want. 
D)  resources that are used to seek rents can't be used to produce goods and services. 
E)  none of the above 
A)  the rent seekers compete too fiercely with each other. 
B)  resources that are used to seek rents don't end up helping anyone in society. 
C)  the rent seekers usually end up spending too much to get what they want. 
D)  resources that are used to seek rents can't be used to produce goods and services. 
E)  none of the above

Exam 24: Monopoly

Exhibit 24-9 -Refer to Exhibit 24-9.A single-price monopolist earns a total profit of __________ when it produces the profit maximizing level of output.

Which of the following is true at the level of output which maximizes profits for a perfectly price-discriminating monopolist?

When the monopoly firm sells two units of its product,it earns total revenue of $260 and it incurs a total cost of $210.If its marginal revenue for the second unit was $110,what was the marginal revenue of the first unit?

Exhibit 24-10 -Refer to Exhibit 24-10.The profit-maximizing single-price monopolist will produce which quantity of output?

If a firm has no variable costs,the profit-maximizing price is also the revenue-maximizing price.

The perfectly price-discriminating monopolist achieves resource allocative efficiency,while the single-price monopolist does not.

When a monopolist can perfectly price discriminate,it follows that

Rent seeking occurs when the seller charges

Suppose a monopolist practices perfect price discrimination.Its marginal revenue curve

Define price discrimination.What three conditions must exist before a firm can use it successfully?

Rent-seeking is said to be socially wasteful because

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