Question 1

Exhibit 9-8 Profit maximizing for a monopolist
​  
-As shown in Exhibit 9-8, the monopolist's total cost is which of the following areas?

Accepted Answer

A)  P1AEP5. 
B)  P2BDP4. 
C)  P3CDP5. 
D)  P4DEP5. 
E)  None of these. 
A)  P1AEP5. 
B)  P2BDP4. 
C)  P3CDP5. 
D)  P4DEP5. 
E)  None of these.

Question 2

If pizza used to be produced in a perfectly competitive market, and now the pizza market has become a monopoly, we can expect:

Accepted Answer

A)  less pizza to be sold at a higher price. 
B)  more pizza to be sold at a higher price. 
C)  less pizza to be sold at a lower price. 
D)  more pizza to be sold at a lower price. 
E)  the same amount of pizza to be sold at the same price. 
A)  less pizza to be sold at a higher price. 
B)  more pizza to be sold at a higher price. 
C)  less pizza to be sold at a lower price. 
D)  more pizza to be sold at a lower price. 
E)  the same amount of pizza to be sold at the same price.

Question 3

When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, the price elasticity of demand is:

Accepted Answer

A)  greater than 1. 
B)  equal to 1. 
C)  less than 2. 
D)  equal to 0. 
A)  greater than 1. 
B)  equal to 1. 
C)  less than 2. 
D)  equal to 0.

Question 4

To maximize its profit, a monopoly should choose a price where demand is:

Accepted Answer

A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  vertical. 
A)  elastic. 
B)  inelastic. 
C)  unitary elastic. 
D)  vertical.

Question 5

A monopolist always earns an economic profit.

Accepted Answer

A) True 
 B)False

Question 6

Under both perfect competition and monopoly, a firm:

Accepted Answer

A)  is a price taker. 
B)  maximizes profit by setting marginal cost equal to marginal revenue. 
C)  will shut down in the short-run if price falls short of average total cost. 
D)  always earns a pure economic profit. 
A)  is a price taker. 
B)  maximizes profit by setting marginal cost equal to marginal revenue. 
C)  will shut down in the short-run if price falls short of average total cost. 
D)  always earns a pure economic profit.

Question 7

Why can a monopoly earn economic profits in the long run?

Accepted Answer

Because a monopoly experiences very stro

Question 8

If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:

Accepted Answer

A)  restrict output to increase the price even higher. 
B)  raise price and expand output to increase profit. 
C)  lower price and expand output to increase profit. 
D)  attempt to maintain this position because it is consistent with profit maximization. 
A)  restrict output to increase the price even higher. 
B)  raise price and expand output to increase profit. 
C)  lower price and expand output to increase profit. 
D)  attempt to maintain this position because it is consistent with profit maximization.

Question 9

Which of the following statements best describe the price, output, and profit conditions of monopoly?

Accepted Answer

A)  Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long-run. 
B)  Price will always equal average variable cost in the short-run and either profits or losses may result in the long run. 
C)  In the long-run, positive economic profit will be earned. 
D)  All of these are true. 
A)  Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long-run. 
B)  Price will always equal average variable cost in the short-run and either profits or losses may result in the long run. 
C)  In the long-run, positive economic profit will be earned. 
D)  All of these are true.

Question 10

Exhibit 9-1 Monopolist's demand curve
​  
-In Exhibit 9-1, the marginal revenue curve corresponding to the monopolist's demand curve would be a straight line drawn between points:

Accepted Answer

A)  A to B. 
B)  A to C. 
C)  A to D. 
D)  C to B. 
E)  C to D. 
A)  A to B. 
B)  A to C. 
C)  A to D. 
D)  C to B. 
E)  C to D.

Question 11

At the point where the marginal revenue equals zero for a monopolist facing a straight-line demand curve, total revenue is:

Accepted Answer

A)  greater than 1. 
B)  maximum. 
C)  less than 1. 
D)  equal to zero. 
A)  greater than 1. 
B)  maximum. 
C)  less than 1. 
D)  equal to zero.

Question 12

Alcoa had a monopoly in the U.S. aluminum market from the late nineteenth century until the end of World War II. Which barrier to entry was the source of Alcoa's monopoly power?

Accepted Answer

A)  Ownership of a vital resource. 
B)  Government franchises and licenses. 
C)  Patents and copyrights. 
D)  Economies of scale. 
A)  Ownership of a vital resource. 
B)  Government franchises and licenses. 
C)  Patents and copyrights. 
D)  Economies of scale.

Question 13

An example of price discrimination is the price charged for:

Accepted Answer

A)  a postage stamp. 
B)  theater tickets that offer lower prices for children. 
C)  an economics textbook at a campus bookstore. 
D)  Any of these. 
A)  a postage stamp. 
B)  theater tickets that offer lower prices for children. 
C)  an economics textbook at a campus bookstore. 
D)  Any of these.

Question 14

For a monopolist:

Accepted Answer

A)  price equals average total cost. 
B)  price is above marginal revenue. 
C)  marginal revenue equals zero. 
D)  marginal cost equals zero. 
E)  average total cost equals marginal cost. 
A)  price equals average total cost. 
B)  price is above marginal revenue. 
C)  marginal revenue equals zero. 
D)  marginal cost equals zero. 
E)  average total cost equals marginal cost.

Question 15

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

Accepted Answer

A)  stay in operation in the short-run. 
B)  earn an economic profit. 
C)  earn an economic profit in the long run. 
D)  shut down. 
A)  stay in operation in the short-run. 
B)  earn an economic profit. 
C)  earn an economic profit in the long run. 
D)  shut down.

Question 16

For a monopolist, marginal revenue is always:

Accepted Answer

A)  below market price. 
B)  equal to market price. 
C)  greater than market price. 
D)  equal to total revenue. 
E)  equal to total cost. 
A)  below market price. 
B)  equal to market price. 
C)  greater than market price. 
D)  equal to total revenue. 
E)  equal to total cost.

Question 17

At any point where a monopolist's marginal revenue is positive, the downward-sloping straight-line demand curve is:

Accepted Answer

A)  perfectly elastic. 
B)  elastic, but not perfectly elastic. 
C)  unit elastic. 
D)  inelastic. 
A)  perfectly elastic. 
B)  elastic, but not perfectly elastic. 
C)  unit elastic. 
D)  inelastic.

Question 18

An industry is said to be a natural monopoly when:

Accepted Answer

A)  legal barriers limit entry into the market. 
B)  diseconomies of scale are present in the market. 
C)  the market demand for the product supplied by a firm is inelastic. 
D)  long-run average cost continues to decline as the quantity of output increases. 
A)  legal barriers limit entry into the market. 
B)  diseconomies of scale are present in the market. 
C)  the market demand for the product supplied by a firm is inelastic. 
D)  long-run average cost continues to decline as the quantity of output increases.

Question 19

Exhibit 9-1 Monopolist's demand curve
​  
-Which of the following points in Exhibit 9-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve? ​

Accepted Answer

A)  A. 
B)  B. 
C)  C. 
D)  C and B. 
A)  A. 
B)  B. 
C)  C. 
D)  C and B.

Question 20

Which of the following is true for a monopolist?

Accepted Answer

A)  The firm has a perfectly elastic demand curve. 
B)  The firm has a perfectly inelastic demand curve. 
C)  The straight-line demand curve is above the marginal revenue curve. 
D)  The marginal revenue curve is above the demand curve. 
E)  All of these. 
A)  The firm has a perfectly elastic demand curve. 
B)  The firm has a perfectly inelastic demand curve. 
C)  The straight-line demand curve is above the marginal revenue curve. 
D)  The marginal revenue curve is above the demand curve. 
E)  All of these.

Exhibit 9-8 Profit maximizing for a monopolist -As shown in Exhibit 9-8, the monopolist's total cost is which of the following areas?

If pizza used to be produced in a perfectly competitive market, and now the pizza market has become a monopoly, we can expect:

When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, the price elasticity of demand is:

To maximize its profit, a monopoly should choose a price where demand is:

A monopolist always earns an economic profit.

Under both perfect competition and monopoly, a firm:

Why can a monopoly earn economic profits in the long run?

If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:

Which of the following statements best describe the price, output, and profit conditions of monopoly?

Exhibit 9-1 Monopolist's demand curve -In Exhibit 9-1, the marginal revenue curve corresponding to the monopolist's demand curve would be a straight line drawn between points:

At the point where the marginal revenue equals zero for a monopolist facing a straight-line demand curve, total revenue is:

Alcoa had a monopoly in the U.S. aluminum market from the late nineteenth century until the end of World War II. Which barrier to entry was the source of Alcoa's monopoly power?

An example of price discrimination is the price charged for:

For a monopolist:

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

For a monopolist, marginal revenue is always:

At any point where a monopolist's marginal revenue is positive, the downward-sloping straight-line demand curve is:

An industry is said to be a natural monopoly when:

Exhibit 9-1 Monopolist's demand curve -Which of the following points in Exhibit 9-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?

Which of the following is true for a monopolist?

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

Exhibit 9-8 Profit maximizing for a monopolist ​ -As shown in Exhibit 9-8, the monopolist's total cost is which of the following areas?

If pizza used to be produced in a perfectly competitive market, and now the pizza market has become a monopoly, we can expect:

When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve, the price elasticity of demand is:

To maximize its profit, a monopoly should choose a price where demand is:

A monopolist always earns an economic profit.

Under both perfect competition and monopoly, a firm:

Why can a monopoly earn economic profits in the long run?

If marginal cost exceeds marginal revenue, a profit-maximizing monopolist will:

Which of the following statements best describe the price, output, and profit conditions of monopoly?

Exhibit 9-1 Monopolist's demand curve ​ -In Exhibit 9-1, the marginal revenue curve corresponding to the monopolist's demand curve would be a straight line drawn between points:

At the point where the marginal revenue equals zero for a monopolist facing a straight-line demand curve, total revenue is:

Alcoa had a monopoly in the U.S. aluminum market from the late nineteenth century until the end of World War II. Which barrier to entry was the source of Alcoa's monopoly power?

An example of price discrimination is the price charged for:

For a monopolist:

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

For a monopolist, marginal revenue is always:

At any point where a monopolist's marginal revenue is positive, the downward-sloping straight-line demand curve is:

An industry is said to be a natural monopoly when:

Exhibit 9-1 Monopolist's demand curve ​ -Which of the following points in Exhibit 9-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve? ​

Which of the following is true for a monopolist?

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 9-8 Profit maximizing for a monopolist -As shown in Exhibit 9-8, the monopolist's total cost is which of the following areas?

Exhibit 9-1 Monopolist's demand curve -In Exhibit 9-1, the marginal revenue curve corresponding to the monopolist's demand curve would be a straight line drawn between points:

Exhibit 9-1 Monopolist's demand curve -Which of the following points in Exhibit 9-1 would not lie on the marginal revenue curve corresponding to the monopolist's straight-line demand curve?