Question 1

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at

Accepted Answer

A) Q = 10. 
B) Q = 15. 
C) Q = 20. 
D) Q = 30. 
A) Q = 10. 
B) Q = 15. 
C) Q = 20. 
D) Q = 30.

Question 2

Table 15-18
A monopolist faces the following demand curve:   Suppose marginal cost is constant at $8 per unit.
-Refer to Table 15-18. Suppose the firm depicted in the table is selling a prescription drug for which it had a patent, but the patent has expired. As new firms enter the market and sell the generic version of this drug competitively, what quantity will be sold?

Accepted Answer

A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units 
A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units

Question 3

The economic inefficiency of a monopolist can be measured by the

Accepted Answer

A) deadweight loss. 
B) value of the unrealized trades that could be made if the monopolist produced the socially-efficient output. 
C) area above marginal cost but beneath demand from the monopoly output to the socially-efficient output. 
D) All of the above are correct. 
A) deadweight loss. 
B) value of the unrealized trades that could be made if the monopolist produced the socially-efficient output. 
C) area above marginal cost but beneath demand from the monopoly output to the socially-efficient output. 
D) All of the above are correct.

Question 4

When a monopolist decreases the price of its good, consumers

Accepted Answer

A) continue to buy the same amount. 
B) buy more. 
C) buy less. 
D) may buy more or less, depending on the price elasticity of demand. 
A) continue to buy the same amount. 
B) buy more. 
C) buy less. 
D) may buy more or less, depending on the price elasticity of demand.

Question 5

When a firm experiences continually declining average total costs, the firm is a

Accepted Answer

A) government-created monopoly. 
B) price taker. 
C) natural monopoly. 
D) revenue maximizer. 
A) government-created monopoly. 
B) price taker. 
C) natural monopoly. 
D) revenue maximizer.

Question 6

If a monopolist is able to perfectly price discriminate,

Accepted Answer

A) consumer surplus is always increased. 
B) total surplus is always decreased. 
C) consumer surplus and deadweight losses are transformed into monopoly profits. 
D) the price effect dominates the output effect on monopoly revenue. 
A) consumer surplus is always increased. 
B) total surplus is always decreased. 
C) consumer surplus and deadweight losses are transformed into monopoly profits. 
D) the price effect dominates the output effect on monopoly revenue.

Question 7

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.  
-Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

Accepted Answer

A) $10 
B) $20 
C) $30 
D) $40 
A) $10 
B) $20 
C) $30 
D) $40

Question 8

A firm that is a natural monopoly

Accepted Answer

A) is not likely to be concerned about new entrants eroding its monopoly power. 
B) is taking advantage of diseconomies of scale. 
C) would experience a lower average total cost if more firms entered the market. 
D) All of the above are correct. 
A) is not likely to be concerned about new entrants eroding its monopoly power. 
B) is taking advantage of diseconomies of scale. 
C) would experience a lower average total cost if more firms entered the market. 
D) All of the above are correct.

Question 9

Figure 15-4  
-Refer to Figure 15-4. If a regulator requires this firm to charge a socially optimal price, which letter represents the amount of output it will produce?

Accepted Answer

The answer of Figure 15-4  
-Refer to Figure 15-4....

Question 10

When the government creates a monopoly, the social loss may include

Accepted Answer

A) declining marginal costs. 
B) the cost of lawyers and lobbyists hired to convince lawmakers to continue the monopoly. 
C) excessive monopoly profits. 
D) diminishing marginal revenue. 
A) declining marginal costs. 
B) the cost of lawyers and lobbyists hired to convince lawmakers to continue the monopoly. 
C) excessive monopoly profits. 
D) diminishing marginal revenue.

Question 11

Figure 15-19  
-Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

Accepted Answer

A) $0. 
B) $1,562.50. 
C) $3,125. 
D) $6,250. 
A) $0. 
B) $1,562.50. 
C) $3,125. 
D) $6,250.

Question 12

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Accepted Answer

The private monopolist is governed by th

Question 13

Perfect price discrimination

Accepted Answer

A) increases profits to the firm. 
B) increases total surplus. 
C) decreases consumer surplus. 
D) All of the above are correct. 
A) increases profits to the firm. 
B) increases total surplus. 
C) decreases consumer surplus. 
D) All of the above are correct.

Question 14

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws.  
-Refer to Figure 15-22. Based upon the information shown, what is the deadweight loss created by Bearclaws?​

Accepted Answer

A) ​$140. 
B) ​$60. 
C) ​$70. 
D) ​$14. 
A) ​$140. 
B) ​$60. 
C) ​$70. 
D) ​$14.

Question 15

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 $50?

Accepted Answer

A) $25,000 
B) $75,000 
C) $100,000 
D) $150,000 
A) $25,000 
B) $75,000 
C) $100,000 
D) $150,000

Question 16

Natural monopolies differ from other forms of monopoly because they are

Accepted Answer

A) not subject to barriers to entry. 
B) not regulated by government. 
C) unable to sustain long-run profits. 
D) are generally not worried about competition eroding their monopoly position in the market. 
A) not subject to barriers to entry. 
B) not regulated by government. 
C) unable to sustain long-run profits. 
D) are generally not worried about competition eroding their monopoly position in the market.

Question 17

Perfect price discrimination describes a situation in which the monopolist

Accepted Answer

A) knows the exact willingness to pay of each of its customers. 
B) charges exactly two different prices to exactly two different groups of customers. 
C) maximizes consumer surplus. 
D) experiences a zero economic profit. 
A) knows the exact willingness to pay of each of its customers. 
B) charges exactly two different prices to exactly two different groups of customers. 
C) maximizes consumer surplus. 
D) experiences a zero economic profit.

Question 18

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 $2,000.

Accepted Answer

A) True 
 B)False

Question 19

A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

Accepted Answer

A) marginal cost and demand curves. 
B) average total cost and demand curves. 
C) marginal revenue and average total cost curves. 
D) marginal revenue and marginal cost curves. 
A) marginal cost and demand curves. 
B) average total cost and demand curves. 
C) marginal revenue and average total cost curves. 
D) marginal revenue and marginal cost curves.

Question 20

It is difficult in a natural monopoly market for the firm to achieve both efficiency and zero economic profit simultaneously, even with regulation.
​

Accepted Answer

A) True 
 B)False

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at

The economic inefficiency of a monopolist can be measured by the

When a monopolist decreases the price of its good, consumers

When a firm experiences continually declining average total costs, the firm is a

If a monopolist is able to perfectly price discriminate,

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

A firm that is a natural monopoly

Figure 15-4 -Refer to Figure 15-4. If a regulator requires this firm to charge a socially optimal price, which letter represents the amount of output it will produce?

When the government creates a monopoly, the social loss may include

Figure 15-19 -Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Perfect price discrimination

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what is the deadweight loss created by Bearclaws?

Natural monopolies differ from other forms of monopoly because they are

Perfect price discrimination describes a situation in which the monopolist

A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

It is difficult in a natural monopoly market for the firm to achieve both efficiency and zero economic profit simultaneously, even with regulation.

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

Exam 15: Monopoly

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at

The economic inefficiency of a monopolist can be measured by the

When a monopolist decreases the price of its good, consumers

When a firm experiences continually declining average total costs, the firm is a

If a monopolist is able to perfectly price discriminate,

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

A firm that is a natural monopoly

Figure 15-4 -Refer to Figure 15-4. If a regulator requires this firm to charge a socially optimal price, which letter represents the amount of output it will produce?

When the government creates a monopoly, the social loss may include

Figure 15-19 -Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Perfect price discrimination

​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what is the deadweight loss created by Bearclaws?​

Natural monopolies differ from other forms of monopoly because they are

Perfect price discrimination describes a situation in which the monopolist

A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

It is difficult in a natural monopoly market for the firm to achieve both efficiency and zero economic profit simultaneously, even with regulation. ​

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. Based upon the information shown, what is the deadweight loss created by Bearclaws?

It is difficult in a natural monopoly market for the firm to achieve both efficiency and zero economic profit simultaneously, even with regulation.