Question 1

Figure 15-1  
-Refer to Figure 15-1. If the monopolist uses perfect price discrimination, how much output does the firm produce?

Accepted Answer

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

Question 2

For a monopoly, the socially efficient level of output occurs where

Accepted Answer

A) marginal revenue equals marginal cost. 
B) average revenue equals marginal cost. 
C) marginal revenue equals average total cost. 
D) average revenue equals average total cost. 
A) marginal revenue equals marginal cost. 
B) average revenue equals marginal cost. 
C) marginal revenue equals average total cost. 
D) average revenue equals average total cost.

Question 3

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

Accepted Answer

A) $200 
B) $400 
C) $600 
D) $800 
A) $200 
B) $400 
C) $600 
D) $800

Question 4

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

Accepted Answer

A) Fixed costs are typically a small portion of total costs. 
B) Average total cost declines over large regions of output. 
C) The product sold is a natural resource such as diamonds or water. 
D) All of the above are correct. 
A) Fixed costs are typically a small portion of total costs. 
B) Average total cost declines over large regions of output. 
C) The product sold is a natural resource such as diamonds or water. 
D) All of the above are correct.

Question 5

When a monopolist increases the amount of output that it produces and sells, average revenue

Accepted Answer

A) increases, and marginal revenue increases. 
B) increases, and marginal revenue decreases. 
C) decreases, and marginal revenue increases. 
D) decreases, and marginal revenue decreases. 
A) increases, and marginal revenue increases. 
B) increases, and marginal revenue decreases. 
C) decreases, and marginal revenue increases. 
D) decreases, and marginal revenue decreases.

Question 6

Price discrimination

Accepted Answer

A) forces monopolies to charge a lower price as a result of government regulation. 
B) is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price. 
C) is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices. 
D) increases the consumer surplus associated with a monopolistic market. 
A) forces monopolies to charge a lower price as a result of government regulation. 
B) is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price. 
C) is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices. 
D) increases the consumer surplus associated with a monopolistic market.

Question 7

Economists assume that monopolists behave as

Accepted Answer

A) cost minimizers. 
B) profit maximizers. 
C) price maximizers. 
D) maximizers of social welfare. 
A) cost minimizers. 
B) profit maximizers. 
C) price maximizers. 
D) maximizers of social welfare.

Question 8

Which of the following statements is correct?

Accepted Answer

A) The demand curve facing a competitive firm is horizontal, as is the demand curve facing a monopolist. 
B) The demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist is horizontal. 
C) The demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping. 
D) The demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist. 
A) The demand curve facing a competitive firm is horizontal, as is the demand curve facing a monopolist. 
B) The demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist is horizontal. 
C) The demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping. 
D) The demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist.

Question 9

Table 15-13
The following table gives information on the price, quantity, and total cost of production for a monopolist.  
-Refer to Table 15-13. How much profit will the firm earn at the profit-maximizing price?

Accepted Answer

A) $9 
B) $12 
C) $15 
D) $18 
A) $9 
B) $12 
C) $15 
D) $18

Question 10

Which of the following is an example of price discrimination?

Accepted Answer

A) Nabisco provides cents-off coupons for its products. 
B) Amtrak offers a lower price for weekend travel compared to weekday rates on the same routes. 
C) Hotel rates for AAA members are lower than for nonmembers. 
D) All of the above are correct. 
A) Nabisco provides cents-off coupons for its products. 
B) Amtrak offers a lower price for weekend travel compared to weekday rates on the same routes. 
C) Hotel rates for AAA members are lower than for nonmembers. 
D) All of the above are correct.

Question 11

Table 15-19
A monopolist faces the following demand curve:  
-Refer to Table 15-19. If a monopolist faces a constant marginal cost of $3, how much output should the firm produce?

Accepted Answer

A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units 
A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units

Question 12

Table 15-4
A monopolist faces the following demand curve:  
-Refer to Table 15-4. If the monopolist produces 10 units, what is its average revenue?

Accepted Answer

A) $100 
B) $15 
C) $10 
D) $1 
A) $100 
B) $15 
C) $10 
D) $1

Question 13

The fundamental cause of monopoly is

Accepted Answer

The answer of The fundamental cause of monopoly is...

Question 14

Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6. How much additional profit can the concert promoters earn by charging each customer their willingness to pay relative to charging a flat price of $50 per ticket?

Accepted Answer

A) $25,000 
B) $50,000 
C) $75,000 
D) $100,000 
A) $25,000 
B) $50,000 
C) $75,000 
D) $100,000

Question 15

Figure 15-18  
-Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to

Accepted Answer

A) $0. 
B) $1,000. 
C) $2,000. 
D) $4,000. 
A) $0. 
B) $1,000. 
C) $2,000. 
D) $4,000.

Question 16

Since a monopolist faces a downward sloping demand curve,

Accepted Answer

A) ​the monopolist is able to sell all that it wants at whatever price the monopolist chooses. 
B) ​it is necessary for the monopolist to lower the price to sell additional units of the good. 
C) ​the monopolist sells only a fraction of the total sales of the good in the market. 
D) ​the monopolist must always make an economic profit. 
A) ​the monopolist is able to sell all that it wants at whatever price the monopolist chooses. 
B) ​it is necessary for the monopolist to lower the price to sell additional units of the good. 
C) ​the monopolist sells only a fraction of the total sales of the good in the market. 
D) ​the monopolist must always make an economic profit.

Question 17

Table 15-19
A monopolist faces the following demand curve:  
-Refer to Table 15-19. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to equate marginal revenue with marginal cost?

Accepted Answer

A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units 
A) 3 units 
B) 4 units 
C) 5 units 
D) 6 units

Question 18

A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces.

Accepted Answer

A) True 
 B)False

Question 19

Table 15-6
A monopolist faces the following demand curve:  
-Refer to Table 15-6. If the monopolist has a constant marginal cost for her product equal to $7, what is her profit-maximizing price?

Accepted Answer

A) $6 
B) $9 
C) $12 
D) $15 
A) $6 
B) $9 
C) $12 
D) $15

Question 20

Scenario 15-2
Consider a local, privately-owned electrical cooperative named Poweshiek Power Company (PPCo). PPCo has just completed a clean-coal-burning electrical power plant in Iowa. Currently, PPCo can meet the electricity needs of all residents in the county. In fact, its capacity far exceeds the needs of the county. After just a few years of operation, the shareholders of PPCo experienced incredibly high rates of return on their investment due to the profitability of the corporation.
-Refer to Scenario 15-2. Which of the following statements is most likely to be true?
(i)New entrants to the market know they will have a smaller market share than PPCo currently has.
(ii)PPCo is a natural monopoly.
(iii)PPCo would experience higher profits if it were government-run.

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)

Exam 15: Monopoly

Figure 15-1 -Refer to Figure 15-1. If the monopolist uses perfect price discrimination, how much output does the firm produce?

For a monopoly, the socially efficient level of output occurs where

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

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

When a monopolist increases the amount of output that it produces and sells, average revenue

Price discrimination

Economists assume that monopolists behave as

Which of the following statements is correct?

Table 15-13 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-13. How much profit will the firm earn at the profit-maximizing price?

Which of the following is an example of price discrimination?

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $3, how much output should the firm produce?

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its average revenue?

The fundamental cause of monopoly is

Figure 15-18 -Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to

Since a monopolist faces a downward sloping demand curve,

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to equate marginal revenue with marginal cost?

A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces.

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. If the monopolist has a constant marginal cost for her product equal to $7, what is her profit-maximizing price?

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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