Question 1

If a pharmaceutical company discovers a new drug and successfully patents it, patent law gives the firm

Accepted Answer

A) partial ownership of the right to sell the drug for a limited number of years. 
B) partial ownership of the right to sell the drug for an unlimited number of years. 
C) sole ownership of the right to sell the drug for a limited number of years. 
D) sole ownership of the right to sell the drug for an unlimited number of years. 
A) partial ownership of the right to sell the drug for a limited number of years. 
B) partial ownership of the right to sell the drug for an unlimited number of years. 
C) sole ownership of the right to sell the drug for a limited number of years. 
D) sole ownership of the right to sell the drug for an unlimited number of years.

Question 2

The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

Accepted Answer

A) price segregation. 
B) price discrimination. 
C) arbitrage. 
D) monopoly pricing. 
A) price segregation. 
B) price discrimination. 
C) arbitrage. 
D) monopoly pricing.

Question 3

Figure 15-2  
-Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what quantity will the firm produce?

Accepted Answer

The answer of Figure 15-2  
-Refer to Figure 15-2....

Question 4

The laws governing patents and copyrights

Accepted Answer

A) promote monopolies. 
B) are intended to serve private interests, not the public's interest. 
C) have costs but not benefits. 
D) eliminate the need for firms to engage in research and development. 
A) promote monopolies. 
B) are intended to serve private interests, not the public's interest. 
C) have costs but not benefits. 
D) eliminate the need for firms to engage in research and development.

Question 5

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost, the firm has no incentive to reduce costs.

Accepted Answer

A) True 
 B)False

Question 6

Table 15-19
A monopolist faces the following demand curve:  
-Refer to Table 15-19. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to equate marginal revenue with marginal cost?

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 7

Which of the following is an example of a barrier to entry?

Accepted Answer

A) Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup. 
B) Mark charges a lower price to students than to faculty for his tattoo services. 
C) Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring. 
D) John obtained a copyright for the song he wrote and recorded. 
A) Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup. 
B) Mark charges a lower price to students than to faculty for his tattoo services. 
C) Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring. 
D) John obtained a copyright for the song he wrote and recorded.

Question 8

Which of the following is not an example of a barrier to entry?

Accepted Answer

A) A soybean farmer is the first in her county to use a new brand of fertilizer. 
B) Microsoft obtains a copyright for its Windows operating system. 
C) A pharmaceutical company obtains a patent for a new medication to treat migraine headaches. 
D) A taxi cab driver in New York City obtains a license to legally provide transportation in New York City. 
A) A soybean farmer is the first in her county to use a new brand of fertilizer. 
B) Microsoft obtains a copyright for its Windows operating system. 
C) A pharmaceutical company obtains a patent for a new medication to treat migraine headaches. 
D) A taxi cab driver in New York City obtains a license to legally provide transportation in New York City.

Question 9

Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.  
-Refer to Table 15-21. What are Tommy's Ties Company's fixed costs?

Accepted Answer

A) $100 
B) $150 
C) $354 
D) $654 
A) $100 
B) $150 
C) $354 
D) $654

Question 10

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

Accepted Answer

A) True 
 B)False

Question 11

The socially efficient quantity is found where the demand curve intersects the marginal cost curve.

Accepted Answer

A) True 
 B)False

Question 12

Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry.

Accepted Answer

A) True 
 B)False

Question 13

The fundamental source of monopoly power is

Accepted Answer

A) many buyers and sellers. 
B) low fixed costs. 
C) rising average total costs. 
D) barriers to entry. 
A) many buyers and sellers. 
B) low fixed costs. 
C) rising average total costs. 
D) barriers to entry.

Question 14

Figure 15-3        
-Refer to Figure 15-3. Which of the following statements is correct?

Accepted Answer

A) Panel C represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly. 
B) Panel B represents the typical demand curve for a perfectly competitive firm, and Panel A represents the typical demand curve for a monopoly. 
C) Panel A represents the typical demand curve for a perfectly competitive firm, and Panel C represents the typical demand curve for a monopoly. 
D) Panel C represents the typical demand curve for a perfectly competitive firm, and Panel D represents the typical demand curve for a monopoly. 
A) Panel C represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly. 
B) Panel B represents the typical demand curve for a perfectly competitive firm, and Panel A represents the typical demand curve for a monopoly. 
C) Panel A represents the typical demand curve for a perfectly competitive firm, and Panel C represents the typical demand curve for a monopoly. 
D) Panel C represents the typical demand curve for a perfectly competitive firm, and Panel D represents the typical demand curve for a monopoly.

Question 15

Movie theatres charge different prices to different groups of people based on the differing marginal costs that exist from group to group.

Accepted Answer

A) True 
 B)False

Question 16

Table 15-3
Consider the following demand and cost information for a monopoly.  
-Refer to Table 15-3. To maximize profit, the monopolist sets price at

Accepted Answer

A) $10. 
B) $15. 
C) $20. 
D) $25. 
A) $10. 
B) $15. 
C) $20. 
D) $25.

Question 17

​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, how many units will Bearclaws produce to maximize profits?

Accepted Answer

A) ​70. 
B) ​90. 
C) ​105. 
D) ​130. 
A) ​70. 
B) ​90. 
C) ​105. 
D) ​130.

Question 18

Table 15-12
The following table provides information on the price, quantity, and average total cost for a monopoly.  
-Refer to Table 15-12. In order to maximize profits, the firm should produce

Accepted Answer

A) 4 units of output. 
B) 8 units of output. 
C) 12 units of output. 
D) 16 units of output. 
A) 4 units of output. 
B) 8 units of output. 
C) 12 units of output. 
D) 16 units of output.

Question 19

Because a monopolist does not face competition from other firms, the outcome in a market with a monopoly

Accepted Answer

A) does not illustrate profit maximization. 
B) is often not in the best interest of society. 
C) is characterized by unlimited profits. 
D) would be improved if the government produced the product rather than a private firm. 
A) does not illustrate profit maximization. 
B) is often not in the best interest of society. 
C) is characterized by unlimited profits. 
D) would be improved if the government produced the product rather than a private firm.

Question 20

If a monopolist's marginal costs increase by $1 for all levels of output, then the monopoly price will

Accepted Answer

A) rise by $1. 
B) rise by more than $1. 
C) rise by less than $1. 
D) not change, but profits will decrease. 
A) rise by $1. 
B) rise by more than $1. 
C) rise by less than $1. 
D) not change, but profits will decrease.

Exam 15: Monopoly

If a pharmaceutical company discovers a new drug and successfully patents it, patent law gives the firm

The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what quantity will the firm produce?

The laws governing patents and copyrights

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost, the firm has no incentive to reduce costs.

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to equate marginal revenue with marginal cost?

Which of the following is an example of a barrier to entry?

Which of the following is not an example of a barrier to entry?

Table 15-21 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. -Refer to Table 15-21. What are Tommy's Ties Company's fixed costs?

A monopolist that can practice perfect price discrimination will not impose a deadweight loss on society.

The socially efficient quantity is found where the demand curve intersects the marginal cost curve.

Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry.

The fundamental source of monopoly power is

Figure 15-3 -Refer to Figure 15-3. Which of the following statements is correct?

Movie theatres charge different prices to different groups of people based on the differing marginal costs that exist from group to group.

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3. To maximize profit, the monopolist sets price at

​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, how many units will Bearclaws produce to maximize profits?

Table 15-12 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-12. In order to maximize profits, the firm should produce

Because a monopolist does not face competition from other firms, the outcome in a market with a monopoly

If a monopolist's marginal costs increase by $1 for all levels of output, then the monopoly price will

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, how many units will Bearclaws produce to maximize profits?