Question 1

A key difference between a monopoly and a perfectly competitive firm is that the monopolist

Accepted Answer

A)  does not face fixed costs in the short run. 
B)  has a marginal revenue curve that lies below its demand curve. 
C)  has no marginal cost curve. 
D)  faces a perfectly elastic demand for its product. 
A)  does not face fixed costs in the short run. 
B)  has a marginal revenue curve that lies below its demand curve. 
C)  has no marginal cost curve. 
D)  faces a perfectly elastic demand for its product.

Question 2

-In the figure above, the efficient amount of output is

Accepted Answer

A)  20 units per day. 
B)  40 units per day. 
C)  60 units per day. 
D)  80 units per day. 
A)  20 units per day. 
B)  40 units per day. 
C)  60 units per day. 
D)  80 units per day.

Question 3

-The above figure represents the cost, demand, and marginal revenue curves for a monopolist.
a) Indicate the price and quantity a single-price monopolist selects by labeling the price Pm and the quantity Qm.
b) In the figure, lightly shade in the area that represents the single-price monopoly's economic profit.
c) Indicate the quantity a perfectly price-discriminating monopolist selects by labeling it Qppd.
d) In the figure, more darkly shade the area that represents the additional economic profit the monopoly earns as a result of the perfect price discrimination.

Accepted Answer

@#IMG-DLM& a) The price is labeled P_m and the quant

Question 4

If a marginal cost pricing rule is imposed on the firm in the figure above, the total surplus will be

Accepted Answer

A)  zero. 
B)  $800. 
C)  $400. 
D)  $200. 
A)  zero. 
B)  $800. 
C)  $400. 
D)  $200.

Question 5

-The figure above shows a monopoly's total revenue and total cost curves. The monopoly's marginal revenue equals its marginal cost when it produces

Accepted Answer

A)  0 units of output. 
B)  5 units of output. 
C)  15 units of output. 
D)  20 units of output. 
A)  0 units of output. 
B)  5 units of output. 
C)  15 units of output. 
D)  20 units of output.

Question 6

Efforts by a firm to obtain a monopoly

Accepted Answer

A)  are called price discrimination. 
B)  increase consumer surplus. 
C)  are called rent seeking. 
D)  are called price taking. 
A)  are called price discrimination. 
B)  increase consumer surplus. 
C)  are called rent seeking. 
D)  are called price taking.

Question 7

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. At the unregulated price and quantity, Light-U-Up's economic profit is equal to

Accepted Answer

A)  -$10. 
B)  $10. 
C)  $40. 
D)  $60. 
A)  -$10. 
B)  $10. 
C)  $40. 
D)  $60.

Question 8

-In the figure above, the elasticity of demand facing the monopoly equals one when it produces ________ units of output.

Accepted Answer

A)  h 
B)  j 
C)  k 
D)  none of the above 
A)  h 
B)  j 
C)  k 
D)  none of the above

Question 9

-The deadweight loss incurred when the market in the above figure is a single-price monopoly rather than perfectly competitive is the area

Accepted Answer

A)  cab. 
B)  fcd. 
C)  bed. 
D)  fae. 
A)  cab. 
B)  fcd. 
C)  bed. 
D)  fae.

Question 10

"A single-price monopolist will always charge a price that is on the elastic range of its demand." Explain why the previous statement is correct or incorrect.

Accepted Answer

The statement is correct. Only when the

Question 11

If a marginal cost pricing rule is imposed on the firm in the figure above, the consumer surplus will be

Accepted Answer

A)  zero. 
B)  $800. 
C)  $400. 
D)  $200. 
A)  zero. 
B)  $800. 
C)  $400. 
D)  $200.

Question 12

-If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then consumer surplus will be

Accepted Answer

A)  $0. 
B)  $8 million. 
C)  $9 million. 
D)  $16 million. 
A)  $0. 
B)  $8 million. 
C)  $9 million. 
D)  $16 million.

Question 13

-In the above figure, the total revenue for a single-price monopolist is shown by the area

Accepted Answer

A)  0P5fQ1. 
B)  P2P4eb. 
C)  0P3cQ1. 
D)  0P4eQ3. 
A)  0P5fQ1. 
B)  P2P4eb. 
C)  0P3cQ1. 
D)  0P4eQ3.

Question 14

-Ron's Hamburger Joint is the only restaurant in town. The above figure represents Ron's cost, demand, and marginal revenue curves. Ron operates as a single-price monopoly.
a) How many hamburgers does Ron produce?
b) What price does Ron charge for a hamburger?
c) What is Ron's total revenue?
d) What is his total cost?
e) What is Ron's economic profit?

Accepted Answer

a) Ron produces 20 hamburgers

Question 15

-If the monopoly illustrated in the figure above could engage in perfect price discrimination, then each buyer would pay

Accepted Answer

A)  $2.00. 
B)  $3.00. 
C)  $3.50. 
D)  a different price. 
A)  $2.00. 
B)  $3.00. 
C)  $3.50. 
D)  a different price.

Question 16

Total revenue of a firm equals

Accepted Answer

A)  marginal revenue multiplied by quantity sold. 
B)  price multiplied by quantity sold. 
C)  total cost minus profit. 
D)  the area between the demand curve and the marginal revenue curve. 
A)  marginal revenue multiplied by quantity sold. 
B)  price multiplied by quantity sold. 
C)  total cost minus profit. 
D)  the area between the demand curve and the marginal revenue curve.

Question 17

While smoking is on the decline in the United States, China is still puffing away madly. That's not because the government is eager to protect its citizens from the hazards of smoking. It's because China is eager to protect its own tobacco industry which is a state monopoly. How would entry of foreign companies into the tobacco market affect the economic profit of the state monopoly?

Accepted Answer

A)  Its economic profits would decrease because of increased competition. 
B)  Its economic profits would increase because of increased competition. 
C)  Its economic profits would decrease because of rent seeking activity. 
D)  Its economic profits would increase because of rent seeking activity. 
A)  Its economic profits would decrease because of increased competition. 
B)  Its economic profits would increase because of increased competition. 
C)  Its economic profits would decrease because of rent seeking activity. 
D)  Its economic profits would increase because of rent seeking activity.

Question 18

Why do some utilities have an incentive to exaggerate their costs of production?

Accepted Answer

Because utilities are generally allowed

Question 19

-The figure above shows a monopoly firm's demand curve. If the price and quantity of haircuts move from point t to point u, the monopoly's

Accepted Answer

A)  total revenue will rise. 
B)  total revenue will fall. 
C)  total revenue will remain the same. 
D)  marginal revenue will increase. 
A)  total revenue will rise. 
B)  total revenue will fall. 
C)  total revenue will remain the same. 
D)  marginal revenue will increase.

Question 20

-The monopoly illustrated in the figure above is unregulated and charges a single price. The deadweight loss created by the monopoly is

Accepted Answer

A)  $0. 
B)  $22.50. 
C)  $45.00. 
D)  $90.00. 
A)  $0. 
B)  $22.50. 
C)  $45.00. 
D)  $90.00.

A key difference between a monopoly and a perfectly competitive firm is that the monopolist

-In the figure above, the efficient amount of output is

If a marginal cost pricing rule is imposed on the firm in the figure above, the total surplus will be

-The figure above shows a monopoly's total revenue and total cost curves. The monopoly's marginal revenue equals its marginal cost when it produces

Efforts by a firm to obtain a monopoly

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. At the unregulated price and quantity, Light-U-Up's economic profit is equal to

-In the figure above, the elasticity of demand facing the monopoly equals one when it produces ________ units of output.

-The deadweight loss incurred when the market in the above figure is a single-price monopoly rather than perfectly competitive is the area

"A single-price monopolist will always charge a price that is on the elastic range of its demand." Explain why the previous statement is correct or incorrect.

If a marginal cost pricing rule is imposed on the firm in the figure above, the consumer surplus will be

-If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then consumer surplus will be

-In the above figure, the total revenue for a single-price monopolist is shown by the area

-If the monopoly illustrated in the figure above could engage in perfect price discrimination, then each buyer would pay

Total revenue of a firm equals

Why do some utilities have an incentive to exaggerate their costs of production?

-The figure above shows a monopoly firm's demand curve. If the price and quantity of haircuts move from point t to point u, the monopoly's

-The monopoly illustrated in the figure above is unregulated and charges a single price. The deadweight loss created by the monopoly is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 13: Monopoly

A key difference between a monopoly and a perfectly competitive firm is that the monopolist

-In the figure above, the efficient amount of output is

If a marginal cost pricing rule is imposed on the firm in the figure above, the total surplus will be

-The figure above shows a monopoly's total revenue and total cost curves. The monopoly's marginal revenue equals its marginal cost when it produces

Efforts by a firm to obtain a monopoly

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. At the unregulated price and quantity, Light-U-Up's economic profit is equal to

-In the figure above, the elasticity of demand facing the monopoly equals one when it produces ________ units of output.

-The deadweight loss incurred when the market in the above figure is a single-price monopoly rather than perfectly competitive is the area

"A single-price monopolist will always charge a price that is on the elastic range of its demand." Explain why the previous statement is correct or incorrect.

If a marginal cost pricing rule is imposed on the firm in the figure above, the consumer surplus will be

-If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then consumer surplus will be

-In the above figure, the total revenue for a single-price monopolist is shown by the area

-If the monopoly illustrated in the figure above could engage in perfect price discrimination, then each buyer would pay

Total revenue of a firm equals

Why do some utilities have an incentive to exaggerate their costs of production?

-The figure above shows a monopoly firm's demand curve. If the price and quantity of haircuts move from point t to point u, the monopoly's

-The monopoly illustrated in the figure above is unregulated and charges a single price. The deadweight loss created by the monopoly is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters