Question 1

-The figure above shows a monopoly firm's demand curve. If the price and quantity of haircuts move from point t to point r, 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 decrease. 
A)  total revenue will rise. 
B)  total revenue will fall. 
C)  total revenue will remain the same. 
D)  marginal revenue will decrease.

Question 2

Rate of return regulation is typically imposed on

Accepted Answer

A)  monopolistically competitive firms. 
B)  an oligopoly. 
C)  a natural monopoly. 
D)  perfectly competitive firms. 
A)  monopolistically competitive firms. 
B)  an oligopoly. 
C)  a natural monopoly. 
D)  perfectly competitive firms.

Question 3

Compared to a similar perfectly competitive industry, a single-price monopoly

Accepted Answer

A)  creates a deadweight loss and decreases economic profit. 
B)  produces more output. 
C)  creates a deadweight loss and decreases consumer surplus. 
D)  is more efficient because there is no wasteful competition. 
A)  creates a deadweight loss and decreases economic profit. 
B)  produces more output. 
C)  creates a deadweight loss and decreases consumer surplus. 
D)  is more efficient because there is no wasteful competition.

Question 4

Explain how a single-price monopoly determines its output and price. Compare this process to how a perfectly competitive firm determines its output and price.

Accepted Answer

Single-price monopolies follow the same

Question 5

When a person lobbies Congress to grant the person the exclusive right to sell a particular good, such lobbying activity is called

Accepted Answer

A)  rent seeking. 
B)  revenue abatement. 
C)  profit recovery. 
D)  revenue seeking. 
A)  rent seeking. 
B)  revenue abatement. 
C)  profit recovery. 
D)  revenue seeking.

Question 6

-Donna owns the only dog grooming salon on Lonely Island. The figure above shows the dog grooming market. Donna is a single-price monopoly that maximizes profit by charging ________ per grooming and producing ________ groomings per day.

Accepted Answer

A)  $30; 8 
B)  $20; $8 
C)  $20; $12 
D)  None of the above answers is correct. 
A)  $30; 8 
B)  $20; $8 
C)  $20; $12 
D)  None of the above answers is correct.

Question 7

-For the monopoly shown in the figure above, the profit maximizing output is

Accepted Answer

A)  4 units per day. 
B)  5 units per day. 
C)  6 units per day. 
D)  10 units per day. 
A)  4 units per day. 
B)  5 units per day. 
C)  6 units per day. 
D)  10 units per day.

Question 8

A natural monopoly under rate of return regulation has an incentive to

Accepted Answer

A)  inflate its costs. 
B)  produce more than the efficient quantity of output. 
C)  charge a price equal to marginal cost. 
D)  maximize consumer surplus. 
A)  inflate its costs. 
B)  produce more than the efficient quantity of output. 
C)  charge a price equal to marginal cost. 
D)  maximize consumer surplus.

Question 9

How does marginal revenue compare to price for a single-price monopoly?

Accepted Answer

Marginal r

Question 10

All of the following are examples of price discrimination EXCEPT

Accepted Answer

A)  buy-one-get-one-free offers. 
B)  "early bird specials" at a restaurant. 
C)  lower ticket prices for matinee performances. 
D)  "buy now, pay later" payment options. 
A)  buy-one-get-one-free offers. 
B)  "early bird specials" at a restaurant. 
C)  lower ticket prices for matinee performances. 
D)  "buy now, pay later" payment options.

Question 11

-The figure above shows a monopoly firm's demand curve. At point u in the figure, the demand facing the monopoly is

Accepted Answer

A)  elastic. 
B)  unit elastic. 
C)  inelastic. 
D)  less than the supply. 
A)  elastic. 
B)  unit elastic. 
C)  inelastic. 
D)  less than the supply.

Question 12

Which of the following is TRUE of a monopoly?

Accepted Answer

A)  It can always increase its revenue by increasing the price to its customers. 
B)  It will always operate somewhere along the inelastic portion of the demand curve. 
C)  Its marginal cost curve is always downward sloping. 
D)  None of the above is correct. 
A)  It can always increase its revenue by increasing the price to its customers. 
B)  It will always operate somewhere along the inelastic portion of the demand curve. 
C)  Its marginal cost curve is always downward sloping. 
D)  None of the above is correct.

Question 13

Under a marginal cost pricing rule, a regulated natural monopoly

Accepted Answer

A)  makes a positive economic profit and there is a deadweight loss. 
B)  makes zero economic profit and there is no deadweight loss. 
C)  incurs an economic loss and there is a deadweight loss. 
D)  incurs an economic loss and there is no deadweight loss. 
A)  makes a positive economic profit and there is a deadweight loss. 
B)  makes zero economic profit and there is no deadweight loss. 
C)  incurs an economic loss and there is a deadweight loss. 
D)  incurs an economic loss and there is no deadweight loss.

Question 14

Often to secure a monopoly, one must erect barriers to entry to obtain a monopoly. What is this activity called in general and what does it entail specifically?

Accepted Answer

Rent seeking is the term used to describ

Question 15

One difference between perfectly competitive markets and single-price monopoly markets is that

Accepted Answer

A)  marginal revenue equals marginal cost for perfectly competitive firms, but not for monopolists. 
B)  marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. 
C)  marginal cost equals average variable cost for perfectly competitive firms but not for monopolists. 
D)  All the above answers are correct. 
A)  marginal revenue equals marginal cost for perfectly competitive firms, but not for monopolists. 
B)  marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists. 
C)  marginal cost equals average variable cost for perfectly competitive firms but not for monopolists. 
D)  All the above answers are correct.

Question 16

-For the monopoly shown in the figure above, the economic profit is

Accepted Answer

A)  $0. 
B)  $10. 
C)  $40. 
D)  $100. 
A)  $0. 
B)  $10. 
C)  $40. 
D)  $100.

Question 17

-The table above gives the demand schedule for water bottled by Wanda's Healthy Waters. Wanda's marginal cost is a constant $4 a bottle and has no fixed cost. Wanda's makes an economic profit of ________ a day.

Accepted Answer

A)  $0 
B)  $24 
C)  $36 
D)  $60 
A)  $0 
B)  $24 
C)  $36 
D)  $60

Question 18

-The table above shows the demand and costs for a single-price monopolist. The maximum economic profit this firm can make equals

Accepted Answer

A)  $1,390. 
B)  $1,550. 
C)  $1,580. 
D)  $2,400. 
A)  $1,390. 
B)  $1,550. 
C)  $1,580. 
D)  $2,400.

Question 19

Price discrimination

Accepted Answer

A)  is common in perfectly competitive markets. 
B)  is more likely for services than for goods that can be stored and resold. 
C)  is illegal because it always violates antitrust laws. 
D)  works only if all groups of demanders have the same price elasticity of demand for the product. 
A)  is common in perfectly competitive markets. 
B)  is more likely for services than for goods that can be stored and resold. 
C)  is illegal because it always violates antitrust laws. 
D)  works only if all groups of demanders have the same price elasticity of demand for the product.

Question 20

-Which area in the above figure equals the consumer surplus under perfect price discrimination?

Accepted Answer

A)  A + B + C + D + E + F + G + H 
B)  A + B + C + D + E 
C)  A + B 
D)  There is no consumer surplus. 
A)  A + B + C + D + E + F + G + H 
B)  A + B + C + D + E 
C)  A + B 
D)  There is no consumer surplus.

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

Rate of return regulation is typically imposed on

Compared to a similar perfectly competitive industry, a single-price monopoly

Explain how a single-price monopoly determines its output and price. Compare this process to how a perfectly competitive firm determines its output and price.

When a person lobbies Congress to grant the person the exclusive right to sell a particular good, such lobbying activity is called

-Donna owns the only dog grooming salon on Lonely Island. The figure above shows the dog grooming market. Donna is a single-price monopoly that maximizes profit by charging per grooming and producing groomings per day.

-For the monopoly shown in the figure above, the profit maximizing output is

A natural monopoly under rate of return regulation has an incentive to

How does marginal revenue compare to price for a single-price monopoly?

All of the following are examples of price discrimination EXCEPT

-The figure above shows a monopoly firm's demand curve. At point u in the figure, the demand facing the monopoly is

Which of the following is TRUE of a monopoly?

Under a marginal cost pricing rule, a regulated natural monopoly

Often to secure a monopoly, one must erect barriers to entry to obtain a monopoly. What is this activity called in general and what does it entail specifically?

One difference between perfectly competitive markets and single-price monopoly markets is that

-For the monopoly shown in the figure above, the economic profit is

-The table above gives the demand schedule for water bottled by Wanda's Healthy Waters. Wanda's marginal cost is a constant $4 a bottle and has no fixed cost. Wanda's makes an economic profit of ________ a day.

-The table above shows the demand and costs for a single-price monopolist. The maximum economic profit this firm can make equals

Price discrimination

-Which area in the above figure equals the consumer surplus under perfect price discrimination?

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

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

Rate of return regulation is typically imposed on

Compared to a similar perfectly competitive industry, a single-price monopoly

Explain how a single-price monopoly determines its output and price. Compare this process to how a perfectly competitive firm determines its output and price.

When a person lobbies Congress to grant the person the exclusive right to sell a particular good, such lobbying activity is called

-Donna owns the only dog grooming salon on Lonely Island. The figure above shows the dog grooming market. Donna is a single-price monopoly that maximizes profit by charging ________ per grooming and producing ________ groomings per day.

-For the monopoly shown in the figure above, the profit maximizing output is

A natural monopoly under rate of return regulation has an incentive to

How does marginal revenue compare to price for a single-price monopoly?

All of the following are examples of price discrimination EXCEPT

-The figure above shows a monopoly firm's demand curve. At point u in the figure, the demand facing the monopoly is

Which of the following is TRUE of a monopoly?

Under a marginal cost pricing rule, a regulated natural monopoly

Often to secure a monopoly, one must erect barriers to entry to obtain a monopoly. What is this activity called in general and what does it entail specifically?

One difference between perfectly competitive markets and single-price monopoly markets is that

-For the monopoly shown in the figure above, the economic profit is

-The table above gives the demand schedule for water bottled by Wanda's Healthy Waters. Wanda's marginal cost is a constant $4 a bottle and has no fixed cost. Wanda's makes an economic profit of ________ a day.

-The table above shows the demand and costs for a single-price monopolist. The maximum economic profit this firm can make equals

Price discrimination

-Which area in the above figure equals the consumer surplus under perfect price discrimination?

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

-Donna owns the only dog grooming salon on Lonely Island. The figure above shows the dog grooming market. Donna is a single-price monopoly that maximizes profit by charging per grooming and producing groomings per day.