Question 1

Figure 15-4  
-Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A) P5 x Q3. 
B) P4 x Q5. 
C) (P5-P3) x Q3. 
D) (P5-P4) x Q3. 
A) P5 x Q3. 
B) P4 x Q5. 
C) (P5-P3) x Q3. 
D) (P5-P4) x Q3.

Question 2

Table 15-9
Consider the following demand and cost information for a monopoly.  
-Refer to Table 15-9. What is the marginal cost of the 4th unit?

Accepted Answer

A) $4 
B) $14 
C) $31 
D) $62 
A) $4 
B) $14 
C) $31 
D) $62

Question 3

Scenario 15-7
Black Box Cable TV is able to purchase an exclusive right to sell a premium movie channel (PMC) in its market area. Let's assume that Black Box Cable pays $150,000 a year for the exclusive marketing rights to PMC. Since Black Box has already installed cable to all of the homes in its market area, the marginal cost of delivering PMC to subscribers is zero. The manager of Black Box needs to know what price to charge for the PMC service to maximize her profit. Before setting price, she hires an economist to estimate demand for the PMC service. The economist discovers that there are two types of subscribers who value premium movie channels. First are the 4,000 die-hard TV viewers who will pay as much as $150 a year for the new PMC premium channel. Second, the PMC channel will appeal to 20,000 occasional TV viewers who will pay as much as $20 a year for a subscription to PMC.
-Refer to Scenario 15-7. If Black Box Cable TV is unable to price discriminate, what price will it choose to maximize its profit, and what is the amount of the profit?

Accepted Answer

A) price = $20; profit = $400,000 
B) price = $20; profit = $330,000 
C) price = $150; profit = $450,000 
D) price = $150; profit = $600,000 
A) price = $20; profit = $400,000 
B) price = $20; profit = $330,000 
C) price = $150; profit = $450,000 
D) price = $150; profit = $600,000

Question 4

Table 15-9
Consider the following demand and cost information for a monopoly.  
-Refer to Table 15-9. At the profit-maximizing price, how much profit will the monopoly earn?

Accepted Answer

A) $8 
B) $10 
C) $12 
D) $14 
A) $8 
B) $10 
C) $12 
D) $14

Question 5

Suppose a monopolist is able to charge each customer a price equal to that customer's willingness-to-pay for the product. Then the monopolist is engaging in

Accepted Answer

A) marginal cost pricing. 
B) arbitrage pricing. 
C) voodoo economics. 
D) perfect price discrimination. 
A) marginal cost pricing. 
B) arbitrage pricing. 
C) voodoo economics. 
D) perfect price discrimination.

Question 6

For a monopoly,

Accepted Answer

A) average revenue exceeds marginal revenue. 
B) average revenue equals marginal revenue. 
C) average revenue is less than marginal revenue. 
D) price equals marginal revenue. 
A) average revenue exceeds marginal revenue. 
B) average revenue equals marginal revenue. 
C) average revenue is less than marginal revenue. 
D) price equals marginal revenue.

Question 7

The simplest way for a monopoly to arise is for a single firm to

Accepted Answer

A) decrease its price below its competitors' prices. 
B) decrease production to increase demand for its product. 
C) make pricing decisions jointly with other firms. 
D) own a key resource. 
A) decrease its price below its competitors' prices. 
B) decrease production to increase demand for its product. 
C) make pricing decisions jointly with other firms. 
D) own a key resource.

Question 8

The distribution of water to residents of a town and an infrequently used bridge are examples of

Accepted Answer

The answer of The distribution of water to residents of...

Question 9

Figure 15-1  
-Refer to Figure 15-1. How much consumer surplus results if this single-price monopolist profit-maximizes?

Accepted Answer

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

Question 10

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 revenue from selling 6 pairs of shoes?

Accepted Answer

A) $100 
B) $600 
C) $625 
D) $660 
A) $100 
B) $600 
C) $625 
D) $660

Question 11

Comparing firms in perfectly competitive markets to monopoly firms, which charges higher prices?

Accepted Answer

The answer of Comparing firms in perfectly competitive markets to...

Question 12

Scenario 15-3
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34.
-Refer to Scenario 15-3. At Q = 500, the firm's total revenue is

Accepted Answer

A) $13,000. 
B) $15,000. 
C) $17,000. 
D) $30,000. 
A) $13,000. 
B) $15,000. 
C) $17,000. 
D) $30,000.

Question 13

When a monopolist increases the quantity that it sells, all else equal, total revenue increases, which is called the output effect.

Accepted Answer

A) True 
 B)False

Question 14

Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is correct?

Accepted Answer

A) Public ownership is preferred to regulation in order to minimize the deadweight losses associated with natural monopolies. 
B) Antitrust laws are always the best way to limit monopoly power. 
C) It is possible that the best approach to monopolies is for the government to do nothing. 
D) Marginal-cost pricing requires a natural monopoly to earn zero economic profits. 
A) Public ownership is preferred to regulation in order to minimize the deadweight losses associated with natural monopolies. 
B) Antitrust laws are always the best way to limit monopoly power. 
C) It is possible that the best approach to monopolies is for the government to do nothing. 
D) Marginal-cost pricing requires a natural monopoly to earn zero economic profits.

Question 16

Which of the following is a characteristic of a monopoly market?

Accepted Answer

A) ​A large number of buyers and sellers. 
B) ​Mutual interdependence. 
C) ​Free entry and exit. 
D) ​A product with no close substitutes. 
A) ​A large number of buyers and sellers. 
B) ​Mutual interdependence. 
C) ​Free entry and exit. 
D) ​A product with no close substitutes.

Question 17

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

Accepted Answer

A) -$120.00. 
B) -$75.40. 
C) -$0.40. 
D) $75.40. 
A) -$120.00. 
B) -$75.40. 
C) -$0.40. 
D) $75.40.

Question 18

What do economists call the business practice of selling the same good at difference prices to different customers?

Accepted Answer

A) price discrimination 
B) collusion 
C) compensating differential 
D) Both a and b are correct 
A) price discrimination 
B) collusion 
C) compensating differential 
D) Both a and b are correct

Question 19

Scenario 15-7
Black Box Cable TV is able to purchase an exclusive right to sell a premium movie channel (PMC) in its market area. Let's assume that Black Box Cable pays $150,000 a year for the exclusive marketing rights to PMC. Since Black Box has already installed cable to all of the homes in its market area, the marginal cost of delivering PMC to subscribers is zero. The manager of Black Box needs to know what price to charge for the PMC service to maximize her profit. Before setting price, she hires an economist to estimate demand for the PMC service. The economist discovers that there are two types of subscribers who value premium movie channels. First are the 4,000 die-hard TV viewers who will pay as much as $150 a year for the new PMC premium channel. Second, the PMC channel will appeal to 20,000 occasional TV viewers who will pay as much as $20 a year for a subscription to PMC.
-Refer to Scenario 15-7. What is the deadweight loss associated with the nondiscriminating pricing policy compared to the price discriminating policy?

Accepted Answer

A) $375,000 
B) $400,000 
C) $475,000 
D) It cannot be determined from the information provided. 
A) $375,000 
B) $400,000 
C) $475,000 
D) It cannot be determined from the information provided.

Question 20

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

Accepted Answer

A) Mighty Mitch's Mining Company owns a unique plot of land in Tanzania, under which lies the only large deposit of Tanzanite in the world. 
B) A college student starts a part-time tutoring business. 
C) A novelist obtains a copyright for her new book. 
D) A taxi cab driver in New York City obtains a license to legally provide transportation in New York City. 
A) Mighty Mitch's Mining Company owns a unique plot of land in Tanzania, under which lies the only large deposit of Tanzanite in the world. 
B) A college student starts a part-time tutoring business. 
C) A novelist obtains a copyright for her new book. 
D) A taxi cab driver in New York City obtains a license to legally provide transportation in New York City.

Figure 15-4 -Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. At the profit-maximizing price, how much profit will the monopoly earn?

Suppose a monopolist is able to charge each customer a price equal to that customer's willingness-to-pay for the product. Then the monopolist is engaging in

For a monopoly,

The simplest way for a monopoly to arise is for a single firm to

The distribution of water to residents of a town and an infrequently used bridge are examples of

Figure 15-1 -Refer to Figure 15-1. How much consumer surplus results if this single-price monopolist profit-maximizes?

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 revenue from selling 6 pairs of shoes?

Comparing firms in perfectly competitive markets to monopoly firms, which charges higher prices?

Scenario 15-3 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. -Refer to Scenario 15-3. At Q = 500, the firm's total revenue is

When a monopolist increases the quantity that it sells, all else equal, total revenue increases, which is called the output effect.

Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

Which of the following statements is correct?

Which of the following is a characteristic of a monopoly market?

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301^st unit of output is

What do economists call the business practice of selling the same good at difference prices to different customers?

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

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

Figure 15-4 -Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. At the profit-maximizing price, how much profit will the monopoly earn?

Suppose a monopolist is able to charge each customer a price equal to that customer's willingness-to-pay for the product. Then the monopolist is engaging in

For a monopoly,

The simplest way for a monopoly to arise is for a single firm to

The distribution of water to residents of a town and an infrequently used bridge are examples of

Figure 15-1 -Refer to Figure 15-1. How much consumer surplus results if this single-price monopolist profit-maximizes?

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 revenue from selling 6 pairs of shoes?

Comparing firms in perfectly competitive markets to monopoly firms, which charges higher prices?

Scenario 15-3 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. -Refer to Scenario 15-3. At Q = 500, the firm's total revenue is

When a monopolist increases the quantity that it sells, all else equal, total revenue increases, which is called the output effect.

Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

Which of the following statements is correct?

Which of the following is a characteristic of a monopoly market?

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

What do economists call the business practice of selling the same good at difference prices to different customers?

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

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

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301^st unit of output is