Question 1

Monopoly firms have

Accepted Answer

A) downward-sloping demand curves, so they can sell as much output as they desire at the market price. 
B) downward-sloping demand curves, so they can sell only the specific price-quantity combinations that lie on the demand curve. 
C) horizontal demand curves, so they can sell as much output as they desire at the market price. 
D) horizontal demand curves, so they can sell only a limited quantity of output at each price. 
A) downward-sloping demand curves, so they can sell as much output as they desire at the market price. 
B) downward-sloping demand curves, so they can sell only the specific price-quantity combinations that lie on the demand curve. 
C) horizontal demand curves, so they can sell as much output as they desire at the market price. 
D) horizontal demand curves, so they can sell only a limited quantity of output at each price.

Question 2

Suppose a profit-maximizing monopolist faces a constant marginal cost of $10, produces an output level of 100 units, and charges a price of $50. The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $4,000.

Accepted Answer

A) True 
 B)False

Question 3

A monopoly is an inefficient way to produce a product because

Accepted Answer

A) it can earn both short-run and long-run profits. 
B) it faces a downward-sloping demand curve. 
C) the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. 
D) it produces a smaller level of output than would be produced in a competitive market. 
A) it can earn both short-run and long-run profits. 
B) it faces a downward-sloping demand curve. 
C) the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. 
D) it produces a smaller level of output than would be produced in a competitive market.

Question 4

Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $150?

Accepted Answer

A) $75,000 
B) $100,000 
C) $150,000 
D) $175,000 
A) $75,000 
B) $100,000 
C) $150,000 
D) $175,000

Question 5

A monopolist's supply curve is horizontal.

Accepted Answer

A) True 
 B)False

Question 6

A benefit of a monopoly is

Accepted Answer

A) lower prices. 
B) a wide variety of similar products. 
C) decreasing long-run average total costs. 
D) greater creativity by authors who can copyright their novels. 
A) lower prices. 
B) a wide variety of similar products. 
C) decreasing long-run average total costs. 
D) greater creativity by authors who can copyright their novels.

Question 7

Which of the following statements is correct?

Accepted Answer

A) The demand curve facing a competitive firm is horizontal, as is the demand curve facing a monopolist. 
B) The demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist is horizontal. 
C) The demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping. 
D) The demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist. 
A) The demand curve facing a competitive firm is horizontal, as is the demand curve facing a monopolist. 
B) The demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist is horizontal. 
C) The demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping. 
D) The demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist.

Question 8

For a monopoly market, total surplus can be defined as the value of the good to

Accepted Answer

A) producers minus the cost incurred by consumers. 
B) producers plus the cost incurred by consumers. 
C) consumers minus the costs of producing the good. 
D) consumers plus the cost of producing the good. 
A) producers minus the cost incurred by consumers. 
B) producers plus the cost incurred by consumers. 
C) consumers minus the costs of producing the good. 
D) consumers plus the cost of producing the good.

Question 9

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws.  
-​Refer to Figure 15-22. Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?

Accepted Answer

A) ​$700. 
B) ​$980. 
C) ​$490. 
D) ​$280. 
A) ​$700. 
B) ​$980. 
C) ​$490. 
D) ​$280.

Question 10

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

Accepted Answer

The answer of In both perfectly competitive and monopoly markets,...

Question 11

A patent gives a single person or firm the exclusive right to sell some good or service for a specific period of time.

Accepted Answer

A) True 
 B)False

Question 12

The economic inefficiency of a monopolist can be measured by the

Accepted Answer

A) number of consumers who are unable to purchase the product because of its high price. 
B) excess profit generated by monopoly firms. 
C) poor quality of service offered by monopoly firms. 
D) deadweight loss. 
A) number of consumers who are unable to purchase the product because of its high price. 
B) excess profit generated by monopoly firms. 
C) poor quality of service offered by monopoly firms. 
D) deadweight loss.

Question 13

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

Accepted Answer

A) not in the best interest of society. 
B) one that fails to maximize total economic well-being. 
C) inefficient. 
D) All of the above are correct. 
A) not in the best interest of society. 
B) one that fails to maximize total economic well-being. 
C) inefficient. 
D) All of the above are correct.

Question 14

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.  
-Refer to Table 15-7. What is the total variable cost of production when Sally produces six pairs of shoes?

Accepted Answer

A) $100 
B) $295 
C) $600 
D) $620 
A) $100 
B) $295 
C) $600 
D) $620

Question 15

Which of the following statements is true about patents and copyrights? (i)
They have benefits and costs.
(ii)
They lead to higher prices.
(iii)
They enhance the ability of monopolists to earn above-average profits.

Accepted Answer

A) (i) and (ii) only 
B) (ii) and (iii) only 
C) (ii) only 
D) (i), (ii), and (iii) 
A) (i) and (ii) only 
B) (ii) and (iii) only 
C) (ii) only 
D) (i), (ii), and (iii)

Question 16

Which of the following is not an example of price discrimination?

Accepted Answer

A) A movie theater charges a lower price for a child's ticket than for an adult's ticket. 
B) A university rebates part of the cost of tuition in the form of financial aid for needy students. 
C) A local pizza chain offers a "buy three get one free" deal. 
D) An ice cream parlor charges a higher price for ice cream than for sherbet. 
A) A movie theater charges a lower price for a child's ticket than for an adult's ticket. 
B) A university rebates part of the cost of tuition in the form of financial aid for needy students. 
C) A local pizza chain offers a "buy three get one free" deal. 
D) An ice cream parlor charges a higher price for ice cream than for sherbet.

Question 17

Figure 15-17  
-Refer to Figure 15-17. Which of the following statements best describes the changes that would occur if this firm were to switch from operating as a single price profit-maximizing monopolist to perfect price discrimination?

Accepted Answer

A) The quantity would increase from I to J, the profit would increase from BCFE to ACG, and the deadweight loss would decrease from EFG to zero. 
B) The quantity would remain constant, the profit would increase from BCFE to ABCFE and the deadweight loss would decrease from EFG to zero. 
C) The quantity would decrease from J to I, the profit would decrease from ACG to BCFE, and the deadweight loss would increase from EFG to ACG. 
D) The quantity would increase from I to J, the profit would decrease from BCFE to EFG, and the deadweight loss remain constant. 
A) The quantity would increase from I to J, the profit would increase from BCFE to ACG, and the deadweight loss would decrease from EFG to zero. 
B) The quantity would remain constant, the profit would increase from BCFE to ABCFE and the deadweight loss would decrease from EFG to zero. 
C) The quantity would decrease from J to I, the profit would decrease from ACG to BCFE, and the deadweight loss would increase from EFG to ACG. 
D) The quantity would increase from I to J, the profit would decrease from BCFE to EFG, and the deadweight loss remain constant.

Question 18

Table 15-18
A monopolist faces the following demand curve:   Suppose marginal cost is constant at $8 per unit.
-Refer to Table 15-18. The monopolist's total revenue from selling 4 units of output is

Accepted Answer

A) $4. 
B) $16. 
C) $32. 
D) $48. 
A) $4. 
B) $16. 
C) $32. 
D) $48.

Question 19

A monopolist that practices perfect price discrimination

Accepted Answer

A) creates no deadweight loss. 
B) charges one group of buyers a higher price than another group, such as offering a student discount. 
C) charges a higher price but produces the same monopoly level of output as when a single price is charged. 
D) charges some customers a price below marginal cost because costs are covered by the high-priced buyers. 
A) creates no deadweight loss. 
B) charges one group of buyers a higher price than another group, such as offering a student discount. 
C) charges a higher price but produces the same monopoly level of output as when a single price is charged. 
D) charges some customers a price below marginal cost because costs are covered by the high-priced buyers.

Question 20

Figure 15-4  
-Refer to Figure 15-4. If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to

Accepted Answer

A) remain unchanged. 
B) decrease. 
C) increase as long as the new level of output is at least Q2. 
D) increase as long as the new level of output is at least Q1. 
A) remain unchanged. 
B) decrease. 
C) increase as long as the new level of output is at least Q2. 
D) increase as long as the new level of output is at least Q1.

Monopoly firms have

A monopoly is an inefficient way to produce a product because

A monopolist's supply curve is horizontal.

A benefit of a monopoly is

Which of the following statements is correct?

For a monopoly market, total surplus can be defined as the value of the good to

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

A patent gives a single person or firm the exclusive right to sell some good or service for a specific period of time.

The economic inefficiency of a monopolist can be measured by the

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the total variable cost of production when Sally produces six pairs of shoes?

Which of the following statements is true about patents and copyrights? (i) They have benefits and costs. (ii) They lead to higher prices. (iii) They enhance the ability of monopolists to earn above-average profits.

Which of the following is not an example of price discrimination?

Figure 15-17 -Refer to Figure 15-17. Which of the following statements best describes the changes that would occur if this firm were to switch from operating as a single price profit-maximizing monopolist to perfect price discrimination?

Table 15-18 A monopolist faces the following demand curve: Suppose marginal cost is constant at $8 per unit. -Refer to Table 15-18. The monopolist's total revenue from selling 4 units of output is

A monopolist that practices perfect price discrimination

Figure 15-4 -Refer to Figure 15-4. If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

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Exam 15: Monopoly

Monopoly firms have

A monopoly is an inefficient way to produce a product because

A monopolist's supply curve is horizontal.

A benefit of a monopoly is

Which of the following statements is correct?

For a monopoly market, total surplus can be defined as the value of the good to

​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -​Refer to Figure 15-22. Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

A patent gives a single person or firm the exclusive right to sell some good or service for a specific period of time.

The economic inefficiency of a monopolist can be measured by the

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the total variable cost of production when Sally produces six pairs of shoes?

Which of the following statements is true about patents and copyrights? (i) They have benefits and costs. (ii) They lead to higher prices. (iii) They enhance the ability of monopolists to earn above-average profits.

Which of the following is not an example of price discrimination?

Figure 15-17 -Refer to Figure 15-17. Which of the following statements best describes the changes that would occur if this firm were to switch from operating as a single price profit-maximizing monopolist to perfect price discrimination?

Table 15-18 A monopolist faces the following demand curve: Suppose marginal cost is constant at $8 per unit. -Refer to Table 15-18. The monopolist's total revenue from selling 4 units of output is

A monopolist that practices perfect price discrimination

Figure 15-4 -Refer to Figure 15-4. If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Filters

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Given that Bearclaws chooses the profit maximizing price and quantity, what profit level will it obtain?