Question 1

Figure 15-2  
-Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what is the amount of profit or loss earned by the firm?

Accepted Answer

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

Question 2

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

Accepted Answer

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

Question 3

Antitrust laws allow the government to

Accepted Answer

A) collect revenues through the antitrust tax. 
B) break up companies. 
C) purchase privately-held companies through eminent domain. 
D) All of the above are correct. 
A) collect revenues through the antitrust tax. 
B) break up companies. 
C) purchase privately-held companies through eminent domain. 
D) All of the above are correct.

Question 4

Figure 15-2  
-Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Accepted Answer

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

Question 5

Figure 15-17  
-Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?

Accepted Answer

A) ABE 
B) BCFE 
C) EFG 
D) ACG 
A) ABE 
B) BCFE 
C) EFG 
D) ACG

Question 6

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Accepted Answer

The defining characteristic of

Question 7

A benefit of a monopoly is

Accepted Answer

A) efficient production. 
B) decreasing long-run marginal costs. 
C) profit that can be invested in research and development. 
D) All of the above are correct. 
A) efficient production. 
B) decreasing long-run marginal costs. 
C) profit that can be invested in research and development. 
D) All of the above are correct.

Question 8

Figure 15-3  
-Refer to Figure 15-3. Use the letters in the figure to identify the profit area for the single price monopolist.

Accepted Answer

The answer of Figure 15-3  
-Refer to Figure 15-3....

Question 9

When a monopolist increases the number of units it sells, there are two effects on revenue. They are the

Accepted Answer

A) demand effect and the supply effect. 
B) competition effect and the cost effect. 
C) competitive effect and the monopoly effect. 
D) output effect and the price effect. 
A) demand effect and the supply effect. 
B) competition effect and the cost effect. 
C) competitive effect and the monopoly effect. 
D) output effect and the price effect.

Question 10

Figure 15-6  
-Refer to Figure 15-6. What area measures the monopolist's profit?

Accepted Answer

A) (K-
C) *W 
B) (L-
A) *T 
C) (K-
B) *W 
D) 0.5[(K-
C) *(Z-T)] 
A) (K-
C) *W 
B) (L-
A) *T 
C) (K-
B) *W 
D) 0.5[(K-
C) *(Z-T)]

Question 11

Patent and copyright laws encourage

Accepted Answer

A) creative activity. 
B) lower prices due to decreasing average total costs. 
C) competition among firms. 
D) All of the above are correct. 
A) creative activity. 
B) lower prices due to decreasing average total costs. 
C) competition among firms. 
D) All of the above are correct.

Question 12

Table 15-5
A monopolist faces the following demand curve:  
-Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price?

Accepted Answer

A) $4 
B) $39 
C) $36 
D) $42 
A) $4 
B) $39 
C) $36 
D) $42

Question 13

When a monopolist increases the amount of output that it produces and sells, the price of its output

Accepted Answer

A) stays the same. 
B) increases. 
C) decreases. 
D) may increase or decrease depending on the price elasticity of demand. 
A) stays the same. 
B) increases. 
C) decreases. 
D) may increase or decrease depending on the price elasticity of demand.

Question 14

In the market for "home heating" consumers typically have several options (e.g., electricity, heating fuel, natural gas, propane, etc.), yet we often think of firms in this industry as behaving like monopolists. Discuss the context in which your electricity provider is a monopolist. Is this characterization universally applicable? Explain your answer.

Accepted Answer

In this case, the firms are monopolists

Question 15

Figure 15-13  
-Refer to Figure 15-13. A profit-maximizing monopolist would create a deadweight loss to society valued at

Accepted Answer

A) $12. 
B) $24. 
C) $42. 
D) $84. 
A) $12. 
B) $24. 
C) $42. 
D) $84.

Question 16

A fundamental source of monopoly market power arises from

Accepted Answer

A) perfectly elastic demand. 
B) perfectly inelastic demand. 
C) barriers to entry. 
D) availability of "free" natural resources, such as water or air. 
A) perfectly elastic demand. 
B) perfectly inelastic demand. 
C) barriers to entry. 
D) availability of "free" natural resources, such as water or air.

Question 17

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

Accepted Answer

A) Tom charges a higher price than his competitors for his golf lessons. 
B) Dick charges a lower price than his competitors for his lawn-mowing services. 
C) Harry offers free concerts on Sunday afternoons as a form of advertising. 
D) Larry obtains a copyright for the new computer game that he invented. 
A) Tom charges a higher price than his competitors for his golf lessons. 
B) Dick charges a lower price than his competitors for his lawn-mowing services. 
C) Harry offers free concerts on Sunday afternoons as a form of advertising. 
D) Larry obtains a copyright for the new computer game that he invented.

Question 18

A firm cannot price discriminate if it

Accepted Answer

A) has perfect information about consumer demand. 
B) operates in a competitive market. 
C) faces a downward-sloping demand curve. 
D) is regulated by the government. 
A) has perfect information about consumer demand. 
B) operates in a competitive market. 
C) faces a downward-sloping demand curve. 
D) is regulated by the government.

Question 19

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 20

Most markets are not monopolies in the real world because

Accepted Answer

A) firms usually face downward-sloping demand curves. 
B) supply curves slope upward. 
C) firms usually equate price with marginal cost. 
D) there are reasonable substitutes for most goods. 
A) firms usually face downward-sloping demand curves. 
B) supply curves slope upward. 
C) firms usually equate price with marginal cost. 
D) there are reasonable substitutes for most goods.

Exam 15: Monopoly

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what is the amount of profit or loss earned by the firm?

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

Antitrust laws allow the government to

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Figure 15-17 -Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

A benefit of a monopoly is

Figure 15-3 -Refer to Figure 15-3. Use the letters in the figure to identify the profit area for the single price monopolist.

When a monopolist increases the number of units it sells, there are two effects on revenue. They are the

Figure 15-6 -Refer to Figure 15-6. What area measures the monopolist's profit?

Patent and copyright laws encourage

Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price?

When a monopolist increases the amount of output that it produces and sells, the price of its output

Figure 15-13 -Refer to Figure 15-13. A profit-maximizing monopolist would create a deadweight loss to society valued at

A fundamental source of monopoly market power arises from

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

A firm cannot price discriminate if it

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

Most markets are not monopolies in the real world because

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

Applications: 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

Measuring a Nation S Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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