Question 1

-The figure above shows a monopoly firm's demand curve. The monopoly's total revenue is at its maximum when the firm produces at point

Accepted Answer

A)  x. 
B)  r. 
C)  t. 
D)  u. 
A)  x. 
B)  r. 
C)  t. 
D)  u.

Question 2

-La Bella Pizza is the only pizza place on Pepper Island. The figure above shows La Bella Pizza's demand curve, marginal revenue curve, and marginal cost curve. At La Bella Pizza's profit-maximizing output, its annual total revenue is

Accepted Answer

A)  $168,000. 
B)  $312,000. 
C)  $336,000. 
D)  $624,000. 
A)  $168,000. 
B)  $312,000. 
C)  $336,000. 
D)  $624,000.

Question 3

-In the figure above, the single-price, unregulated monopoly produces

Accepted Answer

A)  less than 19 units per day. 
B)  20 units per day. 
C)  between 21 and 39 units per day. 
D)  40 or more units per day. 
A)  less than 19 units per day. 
B)  20 units per day. 
C)  between 21 and 39 units per day. 
D)  40 or more units per day.

Question 4

If a natural monopoly has an average cost pricing rule imposed, the rule will

Accepted Answer

A)  maximize total surplus in the regulated industry. 
B)  generate an economic loss for the regulated firm. 
C)  reduce the consumer surplus and generate a deadweight loss when compared to a marginal cost pricing rule. 
D)  set price below marginal cost. 
A)  maximize total surplus in the regulated industry. 
B)  generate an economic loss for the regulated firm. 
C)  reduce the consumer surplus and generate a deadweight loss when compared to a marginal cost pricing rule. 
D)  set price below marginal cost.

Question 5

Monopolists are able to price discriminate because

Accepted Answer

A)  of differing willingness to pay among consumers. 
B)  of differing price elasticities of supply. 
C)  they have constant marginal cost. 
D)  they have constant average cost. 
A)  of differing willingness to pay among consumers. 
B)  of differing price elasticities of supply. 
C)  they have constant marginal cost. 
D)  they have constant average cost.

Question 6

A patent creates a monopoly by restricting

Accepted Answer

A)  demand for the product. 
B)  the number of complements for the product. 
C)  the amount of advertising that can be undertaken. 
D)  entry into the market. 
A)  demand for the product. 
B)  the number of complements for the product. 
C)  the amount of advertising that can be undertaken. 
D)  entry into the market.

Question 7

Rent seeking

Accepted Answer

A)  increases the social cost of monopoly. 
B)  frees scarce resources that could otherwise have been employed in the production of goods and services. 
C)  cannot take the form of lobbying for government imposed import restrictions. 
D)  None of the above answers are correct. 
A)  increases the social cost of monopoly. 
B)  frees scarce resources that could otherwise have been employed in the production of goods and services. 
C)  cannot take the form of lobbying for government imposed import restrictions. 
D)  None of the above answers are correct.

Question 8

Compared to a perfectly competitive industry, a single-price monopoly with the same costs will

Accepted Answer

A)  create less consumer surplus. 
B)  create less economic profit. 
C)  create a deadweight loss. 
D)  Both answers A and C are correct. 
A)  create less consumer surplus. 
B)  create less economic profit. 
C)  create a deadweight loss. 
D)  Both answers A and C are correct.

Question 9

Which of the following statements is TRUE?

Accepted Answer

A)  A perfectly competitive market produces more output and charges a lower price than a single-price monopoly. 
B)  A perfectly competitive market produces more output and charges the same price as a single-price monopoly. 
C)  A perfectly competitive market produces less output and charges a lower price than a single-price monopoly. 
D)  A perfectly competitive market produces less output and charges the same price as a single-price monopoly. 
A)  A perfectly competitive market produces more output and charges a lower price than a single-price monopoly. 
B)  A perfectly competitive market produces more output and charges the same price as a single-price monopoly. 
C)  A perfectly competitive market produces less output and charges a lower price than a single-price monopoly. 
D)  A perfectly competitive market produces less output and charges the same price as a single-price monopoly.

Question 10

A monopoly creates a deadweight loss because the monopoly produces less than the efficient quantity.

Accepted Answer

A) True 
 B)False

Question 11

-Which area in the above figure shows the consumer surplus at the price and quantity that would be attained if the industry were perfectly competitive?

Accepted Answer

A)  A + B + C + D 
B)  A + B + C + D + E 
C)  F + G + H 
D)  A + B + C + D + E + F + G + H 
A)  A + B + C + D 
B)  A + B + C + D + E 
C)  F + G + H 
D)  A + B + C + D + E + F + G + H

Question 12

When a monopoly perfectly price discriminates, there is

Accepted Answer

A)  no producer surplus. 
B)  an increase in supply. 
C)  no consumer surplus. 
D)  a large consumer surplus. 
A)  no producer surplus. 
B)  an increase in supply. 
C)  no consumer surplus. 
D)  a large consumer surplus.

Question 13

-The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is zero if it produces

Accepted Answer

A)  0 units of output. 
B)  5 or 20 units of output. 
C)  15 units of output. 
D)  none of the above 
A)  0 units of output. 
B)  5 or 20 units of output. 
C)  15 units of output. 
D)  none of the above

Question 14

What does the deadweight loss from monopoly measure?

Accepted Answer

The deadweight loss from monopoly measur

Question 15

-Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals could perfectly price discriminate, then which of the following is TRUE?

Accepted Answer

A)  It would produce and sell 16 million inhalers. 
B)  Inhalers would sell for $5 each. 
C)  Inhalers would sell for $2 each. 
D)  None of the above answers is correct. 
A)  It would produce and sell 16 million inhalers. 
B)  Inhalers would sell for $5 each. 
C)  Inhalers would sell for $2 each. 
D)  None of the above answers is correct.

Question 16

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up produces the unregulated, profit-maximizing level of output?

Accepted Answer

A)  abd 
B)  acg 
C)  deg 
D)  There is no deadweight loss. 
A)  abd 
B)  acg 
C)  deg 
D)  There is no deadweight loss.

Question 17

The monopolist always maximizes its profits by producing the amount of output that sets the marginal revenue equal to zero.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT a legal barrier to entry?

Accepted Answer

A)  public franchise 
B)  government license 
C)  patent 
D)  innovation 
A)  public franchise 
B)  government license 
C)  patent 
D)  innovation

Question 19

Briefly describe and discuss the different ways a natural monopoly can be regulated: Marginal cost pricing, average cost pricing, rate of return regulation, and price cap regulation.

Accepted Answer

Marginal cost pricing: The regulated pri

Question 20

-Dee's TV Repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what is the amount of economic profit made or loss incurred at the quantity of TV repairs that profits are maximized or losses minimized?

Accepted Answer

A)  -$400 
B)  $800 
C)  -$100 
D)  $200 
A)  -$400 
B)  $800 
C)  -$100 
D)  $200

-The figure above shows a monopoly firm's demand curve. The monopoly's total revenue is at its maximum when the firm produces at point

-La Bella Pizza is the only pizza place on Pepper Island. The figure above shows La Bella Pizza's demand curve, marginal revenue curve, and marginal cost curve. At La Bella Pizza's profit-maximizing output, its annual total revenue is

-In the figure above, the single-price, unregulated monopoly produces

If a natural monopoly has an average cost pricing rule imposed, the rule will

Monopolists are able to price discriminate because

A patent creates a monopoly by restricting

Rent seeking

Compared to a perfectly competitive industry, a single-price monopoly with the same costs will

Which of the following statements is TRUE?

A monopoly creates a deadweight loss because the monopoly produces less than the efficient quantity.

-Which area in the above figure shows the consumer surplus at the price and quantity that would be attained if the industry were perfectly competitive?

When a monopoly perfectly price discriminates, there is

-The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is zero if it produces

What does the deadweight loss from monopoly measure?

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up produces the unregulated, profit-maximizing level of output?

The monopolist always maximizes its profits by producing the amount of output that sets the marginal revenue equal to zero.

Which of the following is NOT a legal barrier to entry?

Briefly describe and discuss the different ways a natural monopoly can be regulated: Marginal cost pricing, average cost pricing, rate of return regulation, and price cap regulation.

-Dee's TV Repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what is the amount of economic profit made or loss incurred at the quantity of TV repairs that profits are maximized or losses minimized?

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. The monopoly's total revenue is at its maximum when the firm produces at point

-La Bella Pizza is the only pizza place on Pepper Island. The figure above shows La Bella Pizza's demand curve, marginal revenue curve, and marginal cost curve. At La Bella Pizza's profit-maximizing output, its annual total revenue is

-In the figure above, the single-price, unregulated monopoly produces

If a natural monopoly has an average cost pricing rule imposed, the rule will

Monopolists are able to price discriminate because

A patent creates a monopoly by restricting

Rent seeking

Compared to a perfectly competitive industry, a single-price monopoly with the same costs will

Which of the following statements is TRUE?

A monopoly creates a deadweight loss because the monopoly produces less than the efficient quantity.

-Which area in the above figure shows the consumer surplus at the price and quantity that would be attained if the industry were perfectly competitive?

When a monopoly perfectly price discriminates, there is

-The figure above shows a monopoly's total revenue and total cost curves. The monopoly's economic profit is zero if it produces

What does the deadweight loss from monopoly measure?

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up produces the unregulated, profit-maximizing level of output?

The monopolist always maximizes its profits by producing the amount of output that sets the marginal revenue equal to zero.

Which of the following is NOT a legal barrier to entry?

Briefly describe and discuss the different ways a natural monopoly can be regulated: Marginal cost pricing, average cost pricing, rate of return regulation, and price cap regulation.

-Dee's TV Repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what is the amount of economic profit made or loss incurred at the quantity of TV repairs that profits are maximized or losses minimized?

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