Question 1

A firm that is the sole seller of a product without close substitutes is

Accepted Answer

A) perfectly competitive. 
B) monopolistically competitive. 
C) an oligopolist. 
D) a monopolist. 
A) perfectly competitive. 
B) monopolistically competitive. 
C) an oligopolist. 
D) a monopolist.

Question 2

The deadweight loss for a monopolist equals one-half of its profits for any given level of output.

Accepted Answer

A) True 
 B)False

Question 3

A monopolist's supply curve is vertical.

Accepted Answer

A) True 
 B)False

Question 4

A monopolist maximizes profits by

Accepted Answer

A) producing an output level where marginal revenue equals marginal cost. 
B) charging a price that is greater than marginal revenue. 
C) earning a profit of (P - M
C)  x Q. 
D) Both a and b are correct. 
A) producing an output level where marginal revenue equals marginal cost. 
B) charging a price that is greater than marginal revenue. 
C) earning a profit of (P - M
C)  x Q. 
D) Both a and b are correct.

Question 5

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 6

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

Accepted Answer

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

Question 7

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 profit 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 8

Marginal revenue for a monopolist is computed as

Accepted Answer

A) average revenue divided by quantity sold. 
B) average revenue times quantity divided by price. 
C) total revenue divided by quantity sold. 
D) change in total revenue per one unit increase in quantity sold. 
A) average revenue divided by quantity sold. 
B) average revenue times quantity divided by price. 
C) total revenue divided by quantity sold. 
D) change in total revenue per one unit increase in quantity sold.

Question 9

Figure 15-7  
-Refer to Figure 15-7. A profit-maximizing monopolist would incur total costs of

Accepted Answer

A) $81. 
B) $120. 
C) $144. 
D) $240. 
A) $81. 
B) $120. 
C) $144. 
D) $240.

Question 10

Which of the following statements is correct? Monopolies are socially inefficient because they
(i)charge a price above marginal cost.
(ii)produce too little output.
(iii)earn profits at the expense of consumers.
(iv)maximize the market's total surplus.

Accepted Answer

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

Question 11

Table 15-4
A monopolist faces the following demand curve:  
-Refer to Table 15-4. If the monopolist increases production from 2.5 to 5 units, what is its marginal revenue?

Accepted Answer

A) $100 
B) $37.5 
C) $15 
D) $2.50 
A) $100 
B) $37.5 
C) $15 
D) $2.50

Question 12

Scenario 15-8
Mega Media Cable TV is able to purchase an exclusive right to sell a premium sports channel in its market area. Let's assume that Mega Media pays $100,000 a year for the exclusive marketing rights to the sports channel. Since Mega Media has already installed cable to all of the homes in its market area, the marginal cost of delivering the sports channel to subscribers is zero. The manager of Mega Media needs to know what price to charge for the sports channel service to maximize her profit. Before setting price, she hires an economist to estimate demand for the sports channel. The economist discovers that there are two types of subscribers who value premium sporting channels. First are the 3,000 die-hard sports fans who will pay as much as $150 a year for the new channel. Second, the premium sports channel will appeal to 20,000 occasional sports viewers who will pay as much as $25 a year for a subscription to it.
-Refer to Scenario 15-8. If Mega Media Cable TV is able to price discriminate, what would be the maximum amount of profit it could generate?

Accepted Answer

A) $950,000 
B) $850,000 
C) $400,000 
D) $350,000 
A) $950,000 
B) $850,000 
C) $400,000 
D) $350,000

Question 13

When a monopolist reduces the quantity of output it produces and sells, the

Accepted Answer

A) price of its output increases. 
B) price of its output remains constant. 
C) price of its output decreases. 
D) profits for the firm always decrease. 
A) price of its output increases. 
B) price of its output remains constant. 
C) price of its output decreases. 
D) profits for the firm always decrease.

Question 14

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 15

Figure 15-15  
-Refer to Figure 15-15. To maximize its profit, a monopolist would choose which of the following outcomes?

Accepted Answer

A) Q = 30 and P = 30 
B) Q = 30 and P = 60 
C) Q = 45 and P = 45 
D) Q = 60 and P = 30 
A) Q = 30 and P = 30 
B) Q = 30 and P = 60 
C) Q = 45 and P = 45 
D) Q = 60 and P = 30

Question 16

​If a monopoly market were to be transformed into a competitive market, the result would be that

Accepted Answer

A) ​market output would increase. 
B) ​the market would be efficient, once the market reached the competitive output. 
C) ​the deadweight loss from the monopoly would be eliminated. 
D) ​All of the above would be true. 
A) ​market output would increase. 
B) ​the market would be efficient, once the market reached the competitive output. 
C) ​the deadweight loss from the monopoly would be eliminated. 
D) ​All of the above would be true.

Question 17

Table 15-3
Consider the following demand and cost information for a monopoly.  
-Refer to Table 15-3. The marginal revenue of the 2nd unit is

Accepted Answer

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

Question 18

Suppose when a monopolist produces 50 units its average revenue is $8 per unit, its marginal revenue is $4 per unit, its marginal cost is $4 per unit, and its average total cost is $3 per unit. What can we conclude about this monopolist?

Accepted Answer

A) The monopolist is currently maximizing profits, and its total profits are $200. 
B) The monopolist is currently maximizing profits, and its total profits are $250. 
C) The monopolist is not currently maximizing its profits; it should produce more units and charge a lower price to maximize profit. 
D) The monopolist is not currently maximizing its profits; it should produce fewer units and charger a higher price to maximize profit. 
A) The monopolist is currently maximizing profits, and its total profits are $200. 
B) The monopolist is currently maximizing profits, and its total profits are $250. 
C) The monopolist is not currently maximizing its profits; it should produce more units and charge a lower price to maximize profit. 
D) The monopolist is not currently maximizing its profits; it should produce fewer units and charger a higher price to maximize profit.

Question 19

A monopoly market is characterized by

Accepted Answer

A) many buyers and sellers. 
B) "natural" products. 
C) barriers to entry. 
D) a Nash equilibrium. 
A) many buyers and sellers. 
B) "natural" products. 
C) barriers to entry. 
D) a Nash equilibrium.

Question 20

A patent gives the inventor monopoly control over the patented good. Patents also

Accepted Answer

A) ​lead to lower prices for goods. 
B) ​create incentives to develop new products. 
C) lead to an increase in the number of producers of the patented good. 
D) ​lead to increased entry into the market for the patented good. 
A) ​lead to lower prices for goods. 
B) ​create incentives to develop new products. 
C) lead to an increase in the number of producers of the patented good. 
D) ​lead to increased entry into the market for the patented good.

Exam 15: Monopoly

A firm that is the sole seller of a product without close substitutes is

The deadweight loss for a monopolist equals one-half of its profits for any given level of output.

A monopolist's supply curve is vertical.

A monopolist maximizes profits by

The laws governing patents and copyrights

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

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 profit is

Marginal revenue for a monopolist is computed as

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would incur total costs of

Which of the following statements is correct? Monopolies are socially inefficient because they (i)charge a price above marginal cost. (ii)produce too little output. (iii)earn profits at the expense of consumers. (iv)maximize the market's total surplus.

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist increases production from 2.5 to 5 units, what is its marginal revenue?

When a monopolist reduces the quantity of output it produces and sells, the

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

Figure 15-15 -Refer to Figure 15-15. To maximize its profit, a monopolist would choose which of the following outcomes?

​If a monopoly market were to be transformed into a competitive market, the result would be that

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3. The marginal revenue of the 2nd unit is

Suppose when a monopolist produces 50 units its average revenue is $8 per unit, its marginal revenue is $4 per unit, its marginal cost is $4 per unit, and its average total cost is $3 per unit. What can we conclude about this monopolist?

A monopoly market is characterized by

A patent gives the inventor monopoly control over the patented good. Patents also

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

Filters

If a monopoly market were to be transformed into a competitive market, the result would be that