Question 1

A single-price monopoly is characterized by a marginal revenue curve that is

Accepted Answer

A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical. 
A)  upward sloping. 
B)  downward sloping. 
C)  horizontal. 
D)  vertical.

Question 2

In the case of a perfectly price-discriminating monopoly, there is no

Accepted Answer

A)  transfer of consumer surplus to the producer. 
B)  deadweight loss. 
C)  producer surplus. 
D)  economic profit. 
A)  transfer of consumer surplus to the producer. 
B)  deadweight loss. 
C)  producer surplus. 
D)  economic profit.

Question 3

-In the figure above, complete the graph of the electric utility company by adding the marginal revenue and marginal cost curves. Assume the marginal cost is constant at 4¢ per kilowatt-hour. Now discuss the two options regulators have in trying to regulate the firm. Be sure to state the price and quantity that are selected for each option. Also, what price and quantity does the firm select if it is not regulated?

Accepted Answer

@#IMG-DLM& The completed figure is above. The two

Question 4

-In the above figure, what quantity will a single-price monopolist produce?

Accepted Answer

A)  Q1 
B)  Q2 
C)  Q3 
D)  Q4 
A)  Q1 
B)  Q2 
C)  Q3 
D)  Q4

Question 5

A monopoly

Accepted Answer

A)  faces a perfectly elastic demand curve. 
B)  does not need to take account of demand because it's the only seller. 
C)  is able to raise the price it can charge for its product by increasing the quantity sold. 
D)  is able to raise the price it can charge for its product by decreasing the quantity sold. 
A)  faces a perfectly elastic demand curve. 
B)  does not need to take account of demand because it's the only seller. 
C)  is able to raise the price it can charge for its product by increasing the quantity sold. 
D)  is able to raise the price it can charge for its product by decreasing the quantity sold.

Question 6

Compared to a single-price monopoly, the price charged by a perfectly competitive market with the same costs

Accepted Answer

A)  is higher than the monopoly's price. 
B)  is the same as the monopoly's price. 
C)  is lower than the monopoly's price. 
D)  could be higher than, lower than, or the same as the monopoly's price. 
A)  is higher than the monopoly's price. 
B)  is the same as the monopoly's price. 
C)  is lower than the monopoly's price. 
D)  could be higher than, lower than, or the same as the monopoly's price.

Question 7

-The unregulated, single-price monopolist illustrated in the figure above makes an economic profit of

Accepted Answer

A)  zero. 
B)  $8.00 per day. 
C)  $10.00 per day. 
D)  $40.00 per day. 
A)  zero. 
B)  $8.00 per day. 
C)  $10.00 per day. 
D)  $40.00 per day.

Question 8

There is a deadweight loss if a natural monopoly is regulated to use

Accepted Answer

A)  marginal cost pricing and if it is regulated to use average cost pricing. 
B)  average cost pricing and if it is allowed to be unregulated and maximize its profit. 
C)  marginal cost pricing and if it is allowed to be unregulated and maximize its profit. 
D)  None of the above answers is correct. 
A)  marginal cost pricing and if it is regulated to use average cost pricing. 
B)  average cost pricing and if it is allowed to be unregulated and maximize its profit. 
C)  marginal cost pricing and if it is allowed to be unregulated and maximize its profit. 
D)  None of the above answers is correct.

Question 9

A monopoly that sells every unit of its output at the same price is a

Accepted Answer

A)  unit-price monopoly. 
B)  legal monopoly. 
C)  natural monopoly. 
D)  single-price monopoly. 
A)  unit-price monopoly. 
B)  legal monopoly. 
C)  natural monopoly. 
D)  single-price monopoly.

Question 10

-An unregulated, single-price monopoly is shown in the figure above. If its fixed cost is $20, the monopoly's total economic profit when it is maximizing its profit will be

Accepted Answer

A)  negative. 
B)  $0. 
C)  $25. 
D)  $50. 
A)  negative. 
B)  $0. 
C)  $25. 
D)  $50.

Question 11

Which of the following is a barrier to entry for a monopoly?

Accepted Answer

A)  a patent 
B)  severe diseconomies of scale 
C)  close substitutes for the good or service exist 
D)  All of the above answers are correct. 
A)  a patent 
B)  severe diseconomies of scale 
C)  close substitutes for the good or service exist 
D)  All of the above answers are correct.

Question 12

Of the following, consumer surplus is largest for

Accepted Answer

A)  a perfectly competitive industry. 
B)  a single-price monopoly. 
C)  any price-discriminating monopoly. 
D)  a perfectly price-discriminating monopoly. 
A)  a perfectly competitive industry. 
B)  a single-price monopoly. 
C)  any price-discriminating monopoly. 
D)  a perfectly price-discriminating monopoly.

Question 13

Public franchises create monopolies by restricting

Accepted Answer

A)  demand. 
B)  prices. 
C)  entry. 
D)  profit. 
A)  demand. 
B)  prices. 
C)  entry. 
D)  profit.

Question 14

For a monopoly, the market demand curve is the firm's

Accepted Answer

A)  supply curve. 
B)  marginal revenue curve. 
C)  demand curve. 
D)  profit function. 
A)  supply curve. 
B)  marginal revenue curve. 
C)  demand curve. 
D)  profit function.

Question 15

With rent seeking by a monopoly

Accepted Answer

A)  the monopolist's average total costs will increase so that its average total cost curve is tangent to the demand curve at the profit-maximizing price. 
B)  a monopoly uses all of what would be its economic profit to prevent other firms from taking its economic rent. 
C)  the full deadweight loss of monopoly is larger than in the absence of rent seeking. 
D)  All of the above answers are correct. 
A)  the monopolist's average total costs will increase so that its average total cost curve is tangent to the demand curve at the profit-maximizing price. 
B)  a monopoly uses all of what would be its economic profit to prevent other firms from taking its economic rent. 
C)  the full deadweight loss of monopoly is larger than in the absence of rent seeking. 
D)  All of the above answers are correct.

Question 16

Demand Schedule Facing a
Perfectly Price Discriminating Firm
  
-Using the demand schedule in the table above, the total revenue a perfectly price discriminating monopolist receives from selling 5 units of output is

Accepted Answer

A)  $5. 
B)  $15. 
C)  $18. 
D)  $25. 
A)  $5. 
B)  $15. 
C)  $18. 
D)  $25.

Question 17

Perfect price discrimination

Accepted Answer

A)  turns all the producer surplus into consumer surplus. 
B)  turns all the consumer surplus into economic profit. 
C)  creates a deadweight loss. 
D)  cannot result in profit maximization. 
A)  turns all the producer surplus into consumer surplus. 
B)  turns all the consumer surplus into economic profit. 
C)  creates a deadweight loss. 
D)  cannot result in profit maximization.

Question 18

-If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be

Accepted Answer

A)  $0. 
B)  $2 million. 
C)  $4 million. 
D)  $8 million. 
A)  $0. 
B)  $2 million. 
C)  $4 million. 
D)  $8 million.

Question 19

Compared to a single-price monopolist, a price-discriminating monopolist

Accepted Answer

A)  produces more output. 
B)  produces the same amount of output but charges a higher price. 
C)  generates a larger deadweight loss. 
D)  produces less output but charges a lower price. 
A)  produces more output. 
B)  produces the same amount of output but charges a higher price. 
C)  generates a larger deadweight loss. 
D)  produces less output but charges a lower price.

Question 20

A natural monopoly that charges the profit-maximizing price will produce ________ amount of output than a ________.

Accepted Answer

A)  a larger; natural monopoly regulated with an average cost pricing rule 
B)  a more efficient; perfectly competitive industry 
C)  the same; natural monopoly regulated with a marginal cost pricing rule 
D)  a smaller; natural monopoly regulated with a marginal cost pricing rule 
A)  a larger; natural monopoly regulated with an average cost pricing rule 
B)  a more efficient; perfectly competitive industry 
C)  the same; natural monopoly regulated with a marginal cost pricing rule 
D)  a smaller; natural monopoly regulated with a marginal cost pricing rule

A single-price monopoly is characterized by a marginal revenue curve that is

In the case of a perfectly price-discriminating monopoly, there is no

-In the above figure, what quantity will a single-price monopolist produce?

A monopoly

Compared to a single-price monopoly, the price charged by a perfectly competitive market with the same costs

-The unregulated, single-price monopolist illustrated in the figure above makes an economic profit of

There is a deadweight loss if a natural monopoly is regulated to use

A monopoly that sells every unit of its output at the same price is a

-An unregulated, single-price monopoly is shown in the figure above. If its fixed cost is $20, the monopoly's total economic profit when it is maximizing its profit will be

Which of the following is a barrier to entry for a monopoly?

Of the following, consumer surplus is largest for

Public franchises create monopolies by restricting

For a monopoly, the market demand curve is the firm's

With rent seeking by a monopoly

Demand Schedule Facing a Perfectly Price Discriminating Firm -Using the demand schedule in the table above, the total revenue a perfectly price discriminating monopolist receives from selling 5 units of output is

Perfect price discrimination

-If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be

Compared to a single-price monopolist, a price-discriminating monopolist

A natural monopoly that charges the profit-maximizing price will produce amount of output than a .

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 single-price monopoly is characterized by a marginal revenue curve that is

In the case of a perfectly price-discriminating monopoly, there is no

-In the above figure, what quantity will a single-price monopolist produce?

A monopoly

Compared to a single-price monopoly, the price charged by a perfectly competitive market with the same costs

-The unregulated, single-price monopolist illustrated in the figure above makes an economic profit of

There is a deadweight loss if a natural monopoly is regulated to use

A monopoly that sells every unit of its output at the same price is a

-An unregulated, single-price monopoly is shown in the figure above. If its fixed cost is $20, the monopoly's total economic profit when it is maximizing its profit will be

Which of the following is a barrier to entry for a monopoly?

Of the following, consumer surplus is largest for

Public franchises create monopolies by restricting

For a monopoly, the market demand curve is the firm's

With rent seeking by a monopoly

Demand Schedule Facing a Perfectly Price Discriminating Firm -Using the demand schedule in the table above, the total revenue a perfectly price discriminating monopolist receives from selling 5 units of output is

Perfect price discrimination

-If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be

Compared to a single-price monopolist, a price-discriminating monopolist

A natural monopoly that charges the profit-maximizing price will produce ________ amount of output than a ________.

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

A natural monopoly that charges the profit-maximizing price will produce amount of output than a .