Question 1

A monopoly is:

Accepted Answer

A)  a seller of a highly advertised and differentiated product in a market with low barriers to entry in the long run. 
B)  the only seller of a good for which there are no good substitutes in a market with high barriers to entry. 
C)  the only buyer of a unique raw material. 
D)  the producer of a product subsidized by the government. 
A)  a seller of a highly advertised and differentiated product in a market with low barriers to entry in the long run. 
B)  the only seller of a good for which there are no good substitutes in a market with high barriers to entry. 
C)  the only buyer of a unique raw material. 
D)  the producer of a product subsidized by the government. B

Question 2

Which of the following is true under natural monopoly?

Accepted Answer

A)  The marginal cost curve will be above the average cost curve. 
B)  The monopolist will set price equal to marginal cost and will earn economic profits. 
C)  Economies of scale exist. 
D)  Output is produced under conditions of constant cost. 
A)  The marginal cost curve will be above the average cost curve. 
B)  The monopolist will set price equal to marginal cost and will earn economic profits. 
C)  Economies of scale exist. 
D)  Output is produced under conditions of constant cost. C

Question 3

Costs in a natural monopoly are lower because there is only one producer.

Accepted Answer

A) True 
 B)False  True

Question 4

Exhibit 9-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine ​
 
-In Exhibit 9-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

Accepted Answer

A)  $1,500. 
B)  $3,000. 
C)  $4,500. 
D)  $10,500. 
A)  $1,500. 
B)  $3,000. 
C)  $4,500. 
D)  $10,500.

Question 5

Monopoly is a market structure characterized by a:

Accepted Answer

A)  single firm operating as a price taker. 
B)  few firms operating as price takers. 
C)  single firm that is not a price taker. 
D)  none of these. 
A)  single firm operating as a price taker. 
B)  few firms operating as price takers. 
C)  single firm that is not a price taker. 
D)  none of these.

Question 6

Which of the following firms operates in a natural monopoly?

Accepted Answer

A)  Telephone company. 
B)  Electric company. 
C)  Water company. 
D)  All of these. 
A)  Telephone company. 
B)  Electric company. 
C)  Water company. 
D)  All of these.

Question 7

____ is the act of buying a commodity in one market at a lower price and selling it in another market at a higher price.

Accepted Answer

A)  Buying short. 
B)  Discounting. 
C)  Tariffing. 
D)  Arbitrage. 
A)  Buying short. 
B)  Discounting. 
C)  Tariffing. 
D)  Arbitrage.

Question 8

Which of the following is true for the monopolist?

Accepted Answer

A)  Marginal revenue is less than the price charged. 
B)  Economic profit is possible in the long-run. 
C)  Profit maximizing or loss minimizing occurs when marginal revenue equals marginal cost. 
D)  All of the above. 
E)  None of the above. 
A)  Marginal revenue is less than the price charged. 
B)  Economic profit is possible in the long-run. 
C)  Profit maximizing or loss minimizing occurs when marginal revenue equals marginal cost. 
D)  All of the above. 
E)  None of the above.

Question 9

A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.

Accepted Answer

A) True 
 B)False

Question 10

What is the shut-down rule for any firm?

Accepted Answer

Any firm should shut down if losses are

Question 11

Which of the following is a difference between a monopolist and a firm in perfect competition?

Accepted Answer

A)  The marginal revenue curve is downward-sloping. 
B)  Marginal revenue equals price. 
C)  Economic profits are zero in the long-run. 
D)  The marginal revenue curve lies above the demand curve. 
A)  The marginal revenue curve is downward-sloping. 
B)  Marginal revenue equals price. 
C)  Economic profits are zero in the long-run. 
D)  The marginal revenue curve lies above the demand curve.

Question 12

Monopolists are criticized because they are inefficient. What is meant by this statement?

Accepted Answer

A)  Monopolists charge too high a price. 
B)  Monopolists don't innovate enough to control pollution. 
C)  Monopolists produce a large quantity of waste. 
D)  Monopolists usually don't produce at the minimum of the ATC. 
E)  Monopolists could use their resources better elsewhere. 
A)  Monopolists charge too high a price. 
B)  Monopolists don't innovate enough to control pollution. 
C)  Monopolists produce a large quantity of waste. 
D)  Monopolists usually don't produce at the minimum of the ATC. 
E)  Monopolists could use their resources better elsewhere.

Question 13

Which of the following is not associated with the monopoly market structure?

Accepted Answer

A)  Many sellers. 
B)  A single seller. 
C)  A unique product. 
D)  Impossible entry into the market. 
A)  Many sellers. 
B)  A single seller. 
C)  A unique product. 
D)  Impossible entry into the market.

Question 14

Exhibit 9-8 Profit maximizing for a monopolist
​  
-The profit-maximizing output for the monopolist in Exhibit 9-8 is:

Accepted Answer

A)  zero. 
B)  OQ1. 
C)  OQ2 
D)  OQ3. 
A)  zero. 
B)  OQ1. 
C)  OQ2 
D)  OQ3.

Question 15

A monopolist that maximizes total revenue earns maximum economic profit.

Accepted Answer

A) True 
 B)False

Question 16

The strategy underlying price discrimination is to:

Accepted Answer

A)  charge higher prices to customers who have better access to substitutes. 
B)  charge everyone the same price but limit the quantity they are allowed to buy. 
C)  increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand. 
D)  reduce per-unit costs by charging higher prices to those with the most elastic demand and lower prices to those with the most inelastic demand. 
A)  charge higher prices to customers who have better access to substitutes. 
B)  charge everyone the same price but limit the quantity they are allowed to buy. 
C)  increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand. 
D)  reduce per-unit costs by charging higher prices to those with the most elastic demand and lower prices to those with the most inelastic demand.

Question 17

A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.

Accepted Answer

A) True 
 B)False

Question 18

What are the conditions for price discrimination?

Accepted Answer

The firm must possess some ability to co

Question 19

Using the rule that focuses on the marginal approach to maximizing profits, a monopolist charges a price where the:

Accepted Answer

A)  output sold is maximized. 
B)  ATC curve is minimized. 
C)  MR = MC. 
D)  MR = 0. 
A)  output sold is maximized. 
B)  ATC curve is minimized. 
C)  MR = MC. 
D)  MR = 0.

Question 20

Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:

Accepted Answer

A)  earn an economic profit. 
B)  stay in operation in the short-run. 
C)  shut down. 
D)  none of these. 
A)  earn an economic profit. 
B)  stay in operation in the short-run. 
C)  shut down. 
D)  none of these.

A monopoly is:

Which of the following is true under natural monopoly?

Costs in a natural monopoly are lower because there is only one producer.

Exhibit 9-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 9-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

Monopoly is a market structure characterized by a:

Which of the following firms operates in a natural monopoly?

____ is the act of buying a commodity in one market at a lower price and selling it in another market at a higher price.

Which of the following is true for the monopolist?

A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.

What is the shut-down rule for any firm?

Which of the following is a difference between a monopolist and a firm in perfect competition?

Monopolists are criticized because they are inefficient. What is meant by this statement?

Which of the following is not associated with the monopoly market structure?

Exhibit 9-8 Profit maximizing for a monopolist -The profit-maximizing output for the monopolist in Exhibit 9-8 is:

A monopolist that maximizes total revenue earns maximum economic profit.

The strategy underlying price discrimination is to:

A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.

What are the conditions for price discrimination?

Using the rule that focuses on the marginal approach to maximizing profits, a monopolist charges a price where the:

Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exam 9: Monopoly

A monopoly is:

Which of the following is true under natural monopoly?

Costs in a natural monopoly are lower because there is only one producer.

Exhibit 9-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine ​ -In Exhibit 9-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

Monopoly is a market structure characterized by a:

Which of the following firms operates in a natural monopoly?

____ is the act of buying a commodity in one market at a lower price and selling it in another market at a higher price.

Which of the following is true for the monopolist?

A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.

What is the shut-down rule for any firm?

Which of the following is a difference between a monopolist and a firm in perfect competition?

Monopolists are criticized because they are inefficient. What is meant by this statement?

Which of the following is not associated with the monopoly market structure?

Exhibit 9-8 Profit maximizing for a monopolist ​ -The profit-maximizing output for the monopolist in Exhibit 9-8 is:

A monopolist that maximizes total revenue earns maximum economic profit.

The strategy underlying price discrimination is to:

A monopolist will charge a lower price and produce more output than if it was operating in a competitive market.

What are the conditions for price discrimination?

Using the rule that focuses on the marginal approach to maximizing profits, a monopolist charges a price where the:

Suppose a monopolist's demand curve lies below its average variable cost curve. The firm will:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand and Supply

Consumer Choice Theory

Production Costs

Perfect Competition

Monopolistic Competition and Oligopoly

Labor Markets

Income Distribution, Poverty, and Discrimination

Antitrust and Regulation

Environmental Economics

International Trade and Finance

Economies in Transition

Growth and the

Filters

Exhibit 9-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 9-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?

Exhibit 9-8 Profit maximizing for a monopolist -The profit-maximizing output for the monopolist in Exhibit 9-8 is: