Question 1

Figure 15-21  
-Refer to Figure 15-21. What is the price and quantity for this natural monopolist under fair return pricing?

Accepted Answer

A) A and J 
B) E and J 
C) F and K 
D) H and L 
A) A and J 
B) E and J 
C) F and K 
D) H and L

Question 2

A monopolist earns higher profits by charging one price than by practicing price discrimination.

Accepted Answer

A) True 
 B)False

Question 3

Figure 15-6  
-Refer to Figure 15-6. What price will the monopolist charge?

Accepted Answer

A) A 
B) C 
C) K 
D) L 
A) A 
B) C 
C) K 
D) L

Question 4

Figure 15-4  
-Refer to Figure 15-4. If this firm profit maximizes, which letter represents the price it will charge?

Accepted Answer

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

Question 5

Which of the following is an example of public ownership of a monopoly?

Accepted Answer

A) DeBeers 
B) Microsoft 
C) U.S. Postal Service 
D) AT&T 
A) DeBeers 
B) Microsoft 
C) U.S. Postal Service 
D) AT&T

Question 6

Figure 15-4  
-Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Accepted Answer

A) P5. 
B) P4. 
C) P3. 
D) P1. 
A) P5. 
B) P4. 
C) P3. 
D) P1.

Question 7

For a firm to price discriminate,

Accepted Answer

A) it must be a natural monopoly. 
B) it must be regulated by the government. 
C) it must have some market power. 
D) consumers must tell the firm what they are willing to pay for the product. 
A) it must be a natural monopoly. 
B) it must be regulated by the government. 
C) it must have some market power. 
D) consumers must tell the firm what they are willing to pay for the product.

Question 8

​As long as as a monopolist is able to control the resale of its product, then it can successfully practice price discrimination.

Accepted Answer

A) True 
 B)False

Question 9

Compared to the monopoly outcome with a single price, imperfect price discrimination (i)
Sometimes raises total surplus.
(ii)
Sometimes lowers total surplus.
(iii)
Always leads to a lower quantity of output.

Accepted Answer

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

Question 10

Generic drugs enter the pharmaceutical drug market once

Accepted Answer

A) the ingredients to the name brand drug have been discovered. 
B) 10 years have passed. 
C) they are patented. 
D) the patent on the name brand drug expires. 
A) the ingredients to the name brand drug have been discovered. 
B) 10 years have passed. 
C) they are patented. 
D) the patent on the name brand drug expires.

Question 11

Table 15-1  
-Refer to Table 15-1. The marginal revenue becomes negative with the production of which unit of output?

Accepted Answer

The answer of Table 15-1  
-Refer to Table 15-1....

Question 12

Figure 15-19  
-Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then the deadweight loss 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 13

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Accepted Answer

A) earn economic losses. 
B) earn economic profits. 
C) earn zero economic profits. 
D) produce a lower quantity of output than is socially optimal. 
A) earn economic losses. 
B) earn economic profits. 
C) earn zero economic profits. 
D) produce a lower quantity of output than is socially optimal.

Question 14

Table 15-4
A monopolist faces the following demand curve:  
-Refer to Table 15-4. In order to maximize profits, the monopolist should produce

Accepted Answer

A) 7.5 units. 
B) 10 units. 
C) where marginal revenue equals marginal cost. 
D) Both a and c are correct. 
A) 7.5 units. 
B) 10 units. 
C) where marginal revenue equals marginal cost. 
D) Both a and c are correct.

Question 15

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. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th tie?

Accepted Answer

A) $80 
B) $100 
C) $110 
D) $120 
A) $80 
B) $100 
C) $110 
D) $120

Question 16

A monopoly can earn positive profits because it

Accepted Answer

A) can sell unlimited quantities at any price it chooses. 
B) takes the market price as given and can sell unlimited quantities. 
C) can set the price it charges for its output but faces a horizontal demand curve. 
D) can maintain a price such that total revenues will exceed total costs. 
A) can sell unlimited quantities at any price it chooses. 
B) takes the market price as given and can sell unlimited quantities. 
C) can set the price it charges for its output but faces a horizontal demand curve. 
D) can maintain a price such that total revenues will exceed total costs.

Question 17

A key for a monopoly that wants to practice price discrimination is to be able to control the resale of its product.
​

Accepted Answer

A) True 
 B)False

Question 18

Patent and copyright laws encourage

Accepted Answer

A) creative activity. 
B) research and development. 
C) competition among firms. 
D) Both a and b are correct. 
A) creative activity. 
B) research and development. 
C) competition among firms. 
D) Both a and b are correct.

Question 19

Patents, copyrights, and trademarks

Accepted Answer

A) are examples of government-created monopolies. 
B) allow their owners to reduce the costs of what they produce. 
C) generate more revenue for the government than they cost consumers in the form of higher prices. 
D) All of the above are correct. 
A) are examples of government-created monopolies. 
B) allow their owners to reduce the costs of what they produce. 
C) generate more revenue for the government than they cost consumers in the form of higher prices. 
D) All of the above are correct.

Question 20

A market structure with barriers to entry is

Accepted Answer

A) a monopoly. 
B) oligopolistically competitive. 
C) monopolistically competitive. 
D) perfectly competitive. 
A) a monopoly. 
B) oligopolistically competitive. 
C) monopolistically competitive. 
D) perfectly competitive.

Exam 15: Monopoly

Figure 15-21 -Refer to Figure 15-21. What is the price and quantity for this natural monopolist under fair return pricing?

A monopolist earns higher profits by charging one price than by practicing price discrimination.

Figure 15-6 -Refer to Figure 15-6. What price will the monopolist charge?

Figure 15-4 -Refer to Figure 15-4. If this firm profit maximizes, which letter represents the price it will charge?

Which of the following is an example of public ownership of a monopoly?

Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to

For a firm to price discriminate,

​As long as as a monopolist is able to control the resale of its product, then it can successfully practice price discrimination.

Compared to the monopoly outcome with a single price, imperfect price discrimination (i) Sometimes raises total surplus. (ii) Sometimes lowers total surplus. (iii) Always leads to a lower quantity of output.

Generic drugs enter the pharmaceutical drug market once

Table 15-1 -Refer to Table 15-1. The marginal revenue becomes negative with the production of which unit of output?

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

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. In order to maximize profits, the monopolist should produce

A monopoly can earn positive profits because it

A key for a monopoly that wants to practice price discrimination is to be able to control the resale of its product. ​

Patent and copyright laws encourage

Patents, copyrights, and trademarks

A market structure with barriers to entry is

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

As long as as a monopolist is able to control the resale of its product, then it can successfully practice price discrimination.

A key for a monopoly that wants to practice price discrimination is to be able to control the resale of its product.