Question 1

A benefit of a monopoly is

Accepted Answer

A)  efficient production. 
B)  decreasing long-run marginal costs. 
C)  profit that can be invested in research and development. 
D)  All of the above are correct. 
A)  efficient production. 
B)  decreasing long-run marginal costs. 
C)  profit that can be invested in research and development. 
D)  All of the above are correct.

Question 2

Which of the following statements is correct?

Accepted Answer

A)  Both a competitive firm and a monopolist are price takers. 
B)  Both a competitive firm and a monopolist are price makers. 
C)  A competitive firm is a price taker, whereas a monopolist is a price maker. 
D)  A competitive firm is a price maker, whereas a monopolist is a price taker. 
A)  Both a competitive firm and a monopolist are price takers. 
B)  Both a competitive firm and a monopolist are price makers. 
C)  A competitive firm is a price taker, whereas a monopolist is a price maker. 
D)  A competitive firm is a price maker, whereas a monopolist is a price taker.

Question 3

Price discrimination adds to social welfare in the form of
(i)increased total surplus.
(ii)reduced costs of production.
(iii)increased consumer surplus.

Accepted Answer

A)  (i) only 
B)  (i) and (ii) only 
C)  (i) and (iii) only 
D)  (i), (ii), and (iii) 
A)  (i) only 
B)  (i) and (ii) only 
C)  (i) and (iii) only 
D)  (i), (ii), and (iii)

Question 4

For a monopolist,when the price effect is greater than the output effect,marginal revenue is

Accepted Answer

A)  positive. 
B)  negative. 
C)  zero. 
D)  maximized. 
A)  positive. 
B)  negative. 
C)  zero. 
D)  maximized.

Question 5

An industry is a natural monopoly when
(i)the government assists the firm in maintaining the monopoly.
(ii)a single firm owns a key resource.
(iii)a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Accepted Answer

A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (ii) and (iii) only 
A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (ii) and (iii) only

Question 6

Table 15-18
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.
  
-Refer to Table 15-18.If the monopolist can engage in perfect price discrimination,what is the marginal revenue from selling the 5th tie?

Accepted Answer

A)  $80 
B)  $100 
C)  $110 
D)  $120 
A)  $80 
B)  $100 
C)  $110 
D)  $120

Question 7

A monopoly market is characterized by

Accepted Answer

A)  many buyers and sellers. 
B)  "natural" products. 
C)  barriers to entry. 
D)  a Nash equilibrium. 
A)  many buyers and sellers. 
B)  "natural" products. 
C)  barriers to entry. 
D)  a Nash equilibrium.

Question 8

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
  
-Refer to Table 15-8.At what price will the monopolist maximize his profit?

Accepted Answer

A)  $6 
B)  $12 
C)  $18 
D)  $24 
A)  $6 
B)  $12 
C)  $18 
D)  $24

Question 9

One example of price discrimination occurs in the publishing industry when a publisher initially releases an expensive hardcover edition of a popular novel and later releases a cheaper paperback edition.Use this example to demonstrate the benefits and potential pitfalls of a price discrimination pricing strategy.

Accepted Answer

The answer should address the three basi

Question 10

Figure 15-2

-Refer to Figure 15-2.Which of the following statements is correct?

Accepted Answer

A)  Panel C represents the typical demand curve for a perfectly competitive firm. 
B)  Panel B represents the typical demand curve for a monopoly. 
C)  Panel B represents the typical demand curve for a perfectly competitive industry. 
D)  All of the above are correct. 
A)  Panel C represents the typical demand curve for a perfectly competitive firm. 
B)  Panel B represents the typical demand curve for a monopoly. 
C)  Panel B represents the typical demand curve for a perfectly competitive industry. 
D)  All of the above are correct.

Question 11

Figure 15-16
  
-Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit without price discrimination equals

Accepted Answer

A)  $0. 
B)  $1,562.50. 
C)  $3,125. 
D)  $6,250. 
A)  $0. 
B)  $1,562.50. 
C)  $3,125. 
D)  $6,250.

Question 12

For a monopolist,marginal revenue is

Accepted Answer

A)  equal to price, as it is for a perfectly competitive firm. 
B)  less than price, as it is for a perfectly competitive firm. 
C)  equal to price, whereas marginal revenue is less than price for a perfectly competitive firm. 
D)  less than price, whereas marginal revenue is equal to price for a perfectly competitive firm. 
A)  equal to price, as it is for a perfectly competitive firm. 
B)  less than price, as it is for a perfectly competitive firm. 
C)  equal to price, whereas marginal revenue is less than price for a perfectly competitive firm. 
D)  less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.

Question 13

Like competitive firms,monopolies charge a price equal to marginal cost.

Accepted Answer

A) True 
 B)False

Question 14

Figure 15-7
  
-Refer to Figure 15-7.What is the area of deadweight loss?

Accepted Answer

A)  the rectangle (F-
D) xA 
B)  the triangle 1/2[(F-
D) x(B-
A) ] 
C)  the triangle 1/2[(F-G)x(B-
A) ] 
D)  the rectangle (F-
D) xA plus the triangle 1/2[(F-
D) x(B-
A) ] 
A)  the rectangle (F-
D) xA 
B)  the triangle 1/2[(F-
D) x(B-
A) ] 
C)  the triangle 1/2[(F-G)x(B-
A) ] 
D)  the rectangle (F-
D) xA plus the triangle 1/2[(F-
D) x(B-
A) ]

Question 15

Price discrimination

Accepted Answer

A)  forces monopolies to charge a lower price as a result of government regulation. 
B)  is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price. 
C)  is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices. 
D)  increases the consumer surplus associated with a monopolistic market. 
A)  forces monopolies to charge a lower price as a result of government regulation. 
B)  is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price. 
C)  is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices. 
D)  increases the consumer surplus associated with a monopolistic market.

Question 16

Suppose a profit-maximizing monopolist faces a constant marginal cost of $20,produces an output level of 100 units,and charges a price of $50.The socially efficient level of output is 200 units.Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines.The monopoly deadweight loss equals $1,500.

Accepted Answer

A) True 
 B)False

Question 17

For a monopoly market,total surplus can be defined as the value of the good to

Accepted Answer

A)  producers minus the cost incurred by consumers. 
B)  producers plus the cost incurred by consumers. 
C)  consumers minus the costs of producing the good. 
D)  consumers plus the cost of producing the good. 
A)  producers minus the cost incurred by consumers. 
B)  producers plus the cost incurred by consumers. 
C)  consumers minus the costs of producing the good. 
D)  consumers plus the cost of producing the good.

Question 18

Which of the following would be most likely to have monopoly power?

Accepted Answer

A)  a national florist 
B)  an online bookstore 
C)  a local restaurant 
D)  a local electrical cooperative 
A)  a national florist 
B)  an online bookstore 
C)  a local restaurant 
D)  a local electrical cooperative

Question 19

Table 15-3
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-3.The marginal revenue of the 2nd unit is

Accepted Answer

A)  $10. 
B)  $15. 
C)  $20. 
D)  $25. 
A)  $10. 
B)  $15. 
C)  $20. 
D)  $25.

Question 20

Figure 15-11
  
-Refer to Figure 15-11.Which area represents the deadweight loss from monopoly?

Accepted Answer

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

A benefit of a monopoly is

Which of the following statements is correct?

Price discrimination adds to social welfare in the form of (i)increased total surplus. (ii)reduced costs of production. (iii)increased consumer surplus.

For a monopolist,when the price effect is greater than the output effect,marginal revenue is

An industry is a natural monopoly when (i)the government assists the firm in maintaining the monopoly. (ii)a single firm owns a key resource. (iii)a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

A monopoly market is characterized by

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8.At what price will the monopolist maximize his profit?

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

Figure 15-16 -Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit without price discrimination equals

For a monopolist,marginal revenue is

Like competitive firms,monopolies charge a price equal to marginal cost.

Figure 15-7 -Refer to Figure 15-7.What is the area of deadweight loss?

Price discrimination

For a monopoly market,total surplus can be defined as the value of the good to

Which of the following would be most likely to have monopoly power?

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3.The marginal revenue of the 2nd unit is

Figure 15-11 -Refer to Figure 15-11.Which area represents the deadweight loss from monopoly?

Ten Principles of Economics.

Thinking Like an Economist.

Interdependence and the Gains from Trade.

The Market Forces of Supply and Demand.

Elasticity and Its Application

Supply, Demand, And Government Policies.

Consumers, Producers, and the Efficiency of Markets.

Application: The Costs of Taxation.

Application: International Trade.

Externalities.

Public Goods and Common Resources.

The Design of the Tax System.

The Costs of Production.

Firms in Competitive Markets.

Monopolistic Competition.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters

Exam 15: Monopoly.

A benefit of a monopoly is

Which of the following statements is correct?

Price discrimination adds to social welfare in the form of (i)increased total surplus. (ii)reduced costs of production. (iii)increased consumer surplus.

For a monopolist,when the price effect is greater than the output effect,marginal revenue is

An industry is a natural monopoly when (i)the government assists the firm in maintaining the monopoly. (ii)a single firm owns a key resource. (iii)a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

A monopoly market is characterized by

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8.At what price will the monopolist maximize his profit?

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

Figure 15-16 -Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit without price discrimination equals

For a monopolist,marginal revenue is

Like competitive firms,monopolies charge a price equal to marginal cost.

Figure 15-7 -Refer to Figure 15-7.What is the area of deadweight loss?

Price discrimination

For a monopoly market,total surplus can be defined as the value of the good to

Which of the following would be most likely to have monopoly power?

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3.The marginal revenue of the 2nd unit is

Figure 15-11 -Refer to Figure 15-11.Which area represents the deadweight loss from monopoly?

Ten Principles of Economics.

Thinking Like an Economist.

Interdependence and the Gains from Trade.

The Market Forces of Supply and Demand.

Elasticity and Its Application

Supply, Demand, And Government Policies.

Consumers, Producers, and the Efficiency of Markets.

Application: The Costs of Taxation.

Application: International Trade.

Externalities.

Public Goods and Common Resources.

The Design of the Tax System.

The Costs of Production.

Firms in Competitive Markets.

Monopolistic Competition.

Oligopoly.

The Market For the Factors of Production.

Earnings and Discrimination.

Income Inequality and Poverty.

The Theory of Consumer Choice.

Frontiers in Microeconomics.

Filters