Question 1

Answer the question on the basis of the provided demand and cost data for a pure monopolist.   The profit-maximizing price for the monopolist will be

Accepted Answer

A) $5.00. 
B) $2.90. 
C) $3.35. 
D) $4.50. 
A) $5.00. 
B) $2.90. 
C) $3.35. 
D) $4.50.

Question 2

Because of their large-scale level of production, pure monopolists overallocate resources to their industry by producing beyond the P = MC output.

Accepted Answer

A) True 
 B)False

Question 3

A market where there are many firms, but one firm dominates and has the bulk (85 percent)of sales in the market, is called a

Accepted Answer

A) natural monopoly. 
B) monopolistically competitive market. 
C) pure monopoly. 
D) near-monopoly. 
A) natural monopoly. 
B) monopolistically competitive market. 
C) pure monopoly. 
D) near-monopoly.

Question 4

A monopolist, being the sole seller in a market, is assured of positive economic profits.

Accepted Answer

A) True 
 B)False

Question 5

Why is marginal revenue less than price for every level of output except the first for the monopolist?

Accepted Answer

With a downward sloping demand curve, th

Question 6

When compared with the purely competitive industry with identical costs of production, a monopolist will produce

Accepted Answer

A) more output and charge the same price. 
B) more output and charge a higher price. 
C) less output and charge a higher price. 
D) less output and charge the same price. 
A) more output and charge the same price. 
B) more output and charge a higher price. 
C) less output and charge a higher price. 
D) less output and charge the same price.

Question 7

The table shows the demand schedule facing Nina, a monopolist selling baskets. If Nina had no production costs, what price would she charge to maximize profits?

Accepted Answer

A) $12 
B) $16 
C) $14 
D) $10 
A) $12 
B) $16 
C) $14 
D) $10

Question 8

Suppose that a monopolist calculates that at its present output level, marginal cost is $2.00 and marginal revenue is $3.00. The firm could increase profits by

Accepted Answer

A) increasing price and decreasing output. 
B) decreasing price and increasing output. 
C) decreasing price and leaving output unchanged. 
D) decreasing output and leaving price unchanged. 
A) increasing price and decreasing output. 
B) decreasing price and increasing output. 
C) decreasing price and leaving output unchanged. 
D) decreasing output and leaving price unchanged.

Question 9

Refer to the two diagrams for individual firms. Figure 2 pertains to

Accepted Answer

A) a market characterized by government regulation of price and output. 
B) either an imperfectly competitive or a purely competitive seller. 
C) a purely competitive seller. 
D) an imperfectly competitive seller. 
A) a market characterized by government regulation of price and output. 
B) either an imperfectly competitive or a purely competitive seller. 
C) a purely competitive seller. 
D) an imperfectly competitive seller.

Question 10

Refer to the demand and cost data for a pure monopolist given in the table. An unregulated, nondiscriminating monopolist would earn maximum profits of

Accepted Answer

A) $600. 
B) $250. 
C) $500. 
D) $400. 
A) $600. 
B) $250. 
C) $500. 
D) $400.

Question 11

Refer to the diagram for a nondiscriminating monopolist. If the government regulates the monopolist so that it charges the "fair return" price, the monopolist will produce output N.

Accepted Answer

A) True 
 B)False

Question 12

Extensive network effects may drive a market toward natural monopoly because consumers tend to choose a common, standard product that everyone else is using.

Accepted Answer

A) True 
 B)False

Question 13

Suppose that a pure monopolist can sell 15 units of output at $6 per unit and 16 units at $5.70 per unit. For the monopolist to profitably produce and sell the sixteenth unit of output, its marginal cost must be anywhere at or below

Accepted Answer

A) $6. 
B) $5.70. 
C) $1.80. 
D) $1.20. 
A) $6. 
B) $5.70. 
C) $1.80. 
D) $1.20.

Question 14

Answer the question on the basis of the provided demand and cost data for a pure monopolist.   The profit-maximizing monopolist will realize a

Accepted Answer

A) profit of $8.50. 
B) profit of $7.50. 
C) profit of $16.00. 
D) loss of $14.00 
A) profit of $8.50. 
B) profit of $7.50. 
C) profit of $16.00. 
D) loss of $14.00

Question 15

Suppose that a monopolist calculates that at its present output level, marginal revenue is $4.50 and marginal cost is $2.75. It could maximize profits or minimize losses by

Accepted Answer

A) increasing price and decreasing output. 
B) decreasing price and increasing output. 
C) decreasing price and leaving output unchanged. 
D) decreasing output and leaving price unchanged. 
A) increasing price and decreasing output. 
B) decreasing price and increasing output. 
C) decreasing price and leaving output unchanged. 
D) decreasing output and leaving price unchanged.

Question 16

What is the dilemma of regulation in the case of a regulated monopoly?

Accepted Answer

Comparing results of the socially optima

Question 17

What is a patent? How long is the life of a patent?

Accepted Answer

A patent is the exclusive right of an in

Question 18

At its profit-maximizing output, a pure nondiscriminating monopolist achieves

Accepted Answer

A) neither productive efficiency nor allocative efficiency. 
B) both productive efficiency and allocative efficiency. 
C) productive efficiency but not allocative efficiency. 
D) allocative efficiency but not productive efficiency. 
A) neither productive efficiency nor allocative efficiency. 
B) both productive efficiency and allocative efficiency. 
C) productive efficiency but not allocative efficiency. 
D) allocative efficiency but not productive efficiency.

Question 19

"Price makers" refers to firms that

Accepted Answer

A) face a downward-sloping demand curve. 
B) are pure monopolies, rather than monopolistic competitors. 
C) have no ability to influence the market price. 
D) are pure monopolies or monopolistic competitors, but not oligopolies. 
A) face a downward-sloping demand curve. 
B) are pure monopolies, rather than monopolistic competitors. 
C) have no ability to influence the market price. 
D) are pure monopolies or monopolistic competitors, but not oligopolies.

Question 20

Which of the following is a barrier to entry?

Accepted Answer

A) patents and licenses 
B) buyers' incomes 
C) close substitutes 
D) diminishing marginal returns 
A) patents and licenses 
B) buyers' incomes 
C) close substitutes 
D) diminishing marginal returns

Exam 12: Pure Monopoly

Answer the question on the basis of the provided demand and cost data for a pure monopolist. The profit-maximizing price for the monopolist will be

Because of their large-scale level of production, pure monopolists overallocate resources to their industry by producing beyond the P = MC output.

A market where there are many firms, but one firm dominates and has the bulk (85 percent)of sales in the market, is called a

A monopolist, being the sole seller in a market, is assured of positive economic profits.

Why is marginal revenue less than price for every level of output except the first for the monopolist?

When compared with the purely competitive industry with identical costs of production, a monopolist will produce

The table shows the demand schedule facing Nina, a monopolist selling baskets. If Nina had no production costs, what price would she charge to maximize profits?

Suppose that a monopolist calculates that at its present output level, marginal cost is $2.00 and marginal revenue is $3.00. The firm could increase profits by

Refer to the two diagrams for individual firms. Figure 2 pertains to

Refer to the demand and cost data for a pure monopolist given in the table. An unregulated, nondiscriminating monopolist would earn maximum profits of

Refer to the diagram for a nondiscriminating monopolist. If the government regulates the monopolist so that it charges the "fair return" price, the monopolist will produce output N.

Extensive network effects may drive a market toward natural monopoly because consumers tend to choose a common, standard product that everyone else is using.

Suppose that a pure monopolist can sell 15 units of output at $6 per unit and 16 units at $5.70 per unit. For the monopolist to profitably produce and sell the sixteenth unit of output, its marginal cost must be anywhere at or below

Answer the question on the basis of the provided demand and cost data for a pure monopolist. The profit-maximizing monopolist will realize a

Suppose that a monopolist calculates that at its present output level, marginal revenue is $4.50 and marginal cost is $2.75. It could maximize profits or minimize losses by

What is the dilemma of regulation in the case of a regulated monopoly?

What is a patent? How long is the life of a patent?

At its profit-maximizing output, a pure nondiscriminating monopolist achieves

"Price makers" refers to firms that

Which of the following is a barrier to entry?

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, RD, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Health Care

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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