Question 1

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 2

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 3

Table 15-15
A monopolist faces the following demand curve:  
-Refer to Table 15-15. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's profit is

Accepted Answer

A) $88. 
B) $8. 
C) $6. 
D) We do not have enough information to determine profit. 
A) $88. 
B) $8. 
C) $6. 
D) We do not have enough information to determine profit.

Question 4

Figure 15-4  
-Refer to Figure 15-4. If a regulator requires this firm to charge a socially optimal price, which letter represents the amount of output it will produce?

Accepted Answer

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

Question 5

A reduction in a monopolist's fixed costs would

Accepted Answer

A) decrease the profit-maximizing price and increase the profit-maximizing quantity produced. 
B) increase the profit-maximizing price and decrease the profit-maximizing quantity produced. 
C) not effect the profit-maximizing price or quantity. 
D) possibly increase, decrease or not effect profit-maximizing price and quantity, depending on the elasticity of demand. 
A) decrease the profit-maximizing price and increase the profit-maximizing quantity produced. 
B) increase the profit-maximizing price and decrease the profit-maximizing quantity produced. 
C) not effect the profit-maximizing price or quantity. 
D) possibly increase, decrease or not effect profit-maximizing price and quantity, depending on the elasticity of demand.

Question 6

Scenario 15-1
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is:
Passenger Type
Willingness to Pay
Demand per day
Adults
$18
70
Children
$10
25
Senior Citizens
$12
55
Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.
-Refer to Scenario 15-1. What is Vincent's profit on a typical day?

Accepted Answer

The answer of Scenario 15-1
Vincent operates a scenic tour business...

Question 7

The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

Accepted Answer

A) True 
 B)False

Question 8

What are the four ways that government policymakers can respond to the problem of monopoly?

Accepted Answer

First, the government can try to make mo

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

The laws governing patents and copyrights

Accepted Answer

A) eliminate the need for firms to engage in research and development. 
B) are intended to serve private interests, not the public's interest. 
C) reduce fixed costs for firms that obtain them. 
D) None of the above is correct. 
A) eliminate the need for firms to engage in research and development. 
B) are intended to serve private interests, not the public's interest. 
C) reduce fixed costs for firms that obtain them. 
D) None of the above is correct.

Question 11

Antitrust laws may

Accepted Answer

A) enhance the ability of firms to capture profits from a concentration of market power. 
B) enhance the ability of firms to reduce economic losses. 
C) restrict the ability of firms to operate at the socially efficient level of production. 
D) restrict the ability of firms to merge. 
A) enhance the ability of firms to capture profits from a concentration of market power. 
B) enhance the ability of firms to reduce economic losses. 
C) restrict the ability of firms to operate at the socially efficient level of production. 
D) restrict the ability of firms to merge.

Question 12

Figure 15-4  
-Refer to Figure 15-4. If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

Accepted Answer

A) remain unchanged. 
B) decrease. 
C) increase as long as the new level of output is at least Q2. 
D) None of the above is correct. The monopolist currently maximizing profits at Q4. 
A) remain unchanged. 
B) decrease. 
C) increase as long as the new level of output is at least Q2. 
D) None of the above is correct. The monopolist currently maximizing profits at Q4.

Question 13

If the government regulates the price that a natural monopolist can charge to be equal to the firm's marginal cost, the firm will

Accepted Answer

A) earn zero profits. 
B) earn positive profits, causing other firms to enter the industry. 
C) earn negative profits, causing the firm to exit the industry. 
D) minimize costs in order to lower the price that it charges. 
A) earn zero profits. 
B) earn positive profits, causing other firms to enter the industry. 
C) earn negative profits, causing the firm to exit the industry. 
D) minimize costs in order to lower the price that it charges.

Question 14

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 15

Table 15-14
The following table gives information on the price, quantity, and total cost of production for a monopolist.  
-Refer to Table 15-14. At what price does marginal revenue equal marginal cost?

Accepted Answer

A) $5 
B) $4 
C) $3 
D) $2 
A) $5 
B) $4 
C) $3 
D) $2

Question 16

Barriers to entry only exist for monopoly markets.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Figure 15-3  
-Refer to Figure 15-3. If this firm were able to perfectly price discriminate, which letter represents the amount of output it would produce?

Accepted Answer

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

Question 19

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 total profit at the profit-maximizing quantity?

Accepted Answer

A) $325 
B) $435 
C) $565 
D) $1000 
A) $325 
B) $435 
C) $565 
D) $1000

Question 20

Which of the following statements is not correct?

Accepted Answer

A) Part of the deadweight loss associated with monopoly is measured by the monopolist's economic profit. 
B) Marginal cost is always less than average total cost in a natural monopoly. 
C) Discount coupons available free to the public are a type of price discrimination. 
D) Anti-trust laws make it harder for firms to create synergies. 
A) Part of the deadweight loss associated with monopoly is measured by the monopolist's economic profit. 
B) Marginal cost is always less than average total cost in a natural monopoly. 
C) Discount coupons available free to the public are a type of price discrimination. 
D) Anti-trust laws make it harder for firms to create synergies.

Exam 15: Monopoly

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

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?

Table 15-15 A monopolist faces the following demand curve: -Refer to Table 15-15. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's profit is

Figure 15-4 -Refer to Figure 15-4. If a regulator requires this firm to charge a socially optimal price, which letter represents the amount of output it will produce?

A reduction in a monopolist's fixed costs would

The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

What are the four ways that government policymakers can respond to the problem of monopoly?

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

The laws governing patents and copyrights

Antitrust laws may

Figure 15-4 -Refer to Figure 15-4. If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

If the government regulates the price that a natural monopolist can charge to be equal to the firm's marginal cost, the firm will

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

Table 15-14 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-14. At what price does marginal revenue equal marginal cost?

Barriers to entry only exist for monopoly markets.

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

Figure 15-3 -Refer to Figure 15-3. If this firm were able to perfectly price discriminate, which letter represents the amount of output it would produce?

Which of the following statements is not correct?

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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