Question 1

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Accepted Answer

A)  quantity is lower than the socially-optimal quantity. 
B)  price equals marginal revenue. 
C)  price is the same as average revenue. 
D)  earns positive profits. 
A)  quantity is lower than the socially-optimal quantity. 
B)  price equals marginal revenue. 
C)  price is the same as average revenue. 
D)  earns positive profits.

Question 2

Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6.How much additional profit can the concert promoters earn by charging each customer their willingness to pay relative to charging a flat price of $150 per ticket?

Accepted Answer

A)  $25,000 
B)  $50,000 
C)  $75,000 
D)  $100,000 
A)  $25,000 
B)  $50,000 
C)  $75,000 
D)  $100,000

Question 3

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Accepted Answer

A) True 
 B)False

Question 4

Table 15-17
  
-Refer to Table 15-17.If a monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Accepted Answer

A)  3 units 
B)  4 units 
C)  5 units 
D)  6 units 
A)  3 units 
B)  4 units 
C)  5 units 
D)  6 units

Question 5

Consider a profit-maximizing monopoly pricing under the following conditions.The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.The socially efficient level of production is 12 units.The demand curve and marginal cost curves are linear.What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)  $4 
B)  $6 
C)  $12 
D)  $16 
A)  $4 
B)  $6 
C)  $12 
D)  $16

Question 6

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

Accepted Answer

A)  Airlines are practicing imperfect price discrimination to raise their profits. 
B)  Airlines charge a different rate based on the different nature of peoples' travel needs. 
C)  Airlines are attempting to charge people based on their willingness to pay. 
D)  All of the above are correct. 
A)  Airlines are practicing imperfect price discrimination to raise their profits. 
B)  Airlines charge a different rate based on the different nature of peoples' travel needs. 
C)  Airlines are attempting to charge people based on their willingness to pay. 
D)  All of the above are correct.

Question 7

In a monopoly market,the socially efficient quantity of output is typically higher than the profit-maximizing quantity of output for the monopolist.

Accepted Answer

A) True 
 B)False

Question 8

For a long while,electricity producers were thought to be a classic example of a natural monopoly.People held this view because

Accepted Answer

A)  the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region. 
B)  the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region. 
C)  the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region. 
D)  electricity is a special non-excludable good that could never be sold in a competitive market. 
A)  the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region. 
B)  the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region. 
C)  the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region. 
D)  electricity is a special non-excludable good that could never be sold in a competitive market.

Question 9

Table 15-6
A monopolist faces the following demand curve:
  
-Refer to Table 15-6.What is the marginal revenue from the sale of the 2nd unit?

Accepted Answer

A)  $-3 
B)  $3 
C)  $9 
D)  $24 
A)  $-3 
B)  $3 
C)  $9 
D)  $24

Question 10

Perfect price discrimination describes a situation in which the monopolist

Accepted Answer

A)  knows the exact willingness to pay of each of its customers. 
B)  charges exactly two different prices to exactly two different groups of customers. 
C)  maximizes consumer surplus. 
D)  experiences a zero economic profit. 
A)  knows the exact willingness to pay of each of its customers. 
B)  charges exactly two different prices to exactly two different groups of customers. 
C)  maximizes consumer surplus. 
D)  experiences a zero economic profit.

Question 11

A firm cannot price discriminate if

Accepted Answer

A)  its has declining marginal revenue. 
B)  it operates in a competitive market. 
C)  buyers only reveal the price they are willing to pay for the product. 
D)  it has a constant marginal cost. 
A)  its has declining marginal revenue. 
B)  it operates in a competitive market. 
C)  buyers only reveal the price they are willing to pay for the product. 
D)  it has a constant marginal cost.

Question 12

For a monopolist,

Accepted Answer

A)  average revenue is always greater than the price of the good. 
B)  marginal revenue is always less than the price of the good. 
C)  marginal cost is always greater than average total cost. 
D)  marginal revenue equals marginal cost at the point where total revenue is maximized. 
A)  average revenue is always greater than the price of the good. 
B)  marginal revenue is always less than the price of the good. 
C)  marginal cost is always greater than average total cost. 
D)  marginal revenue equals marginal cost at the point where total revenue is maximized.

Question 13

The three main sources of barriers to entry are monopoly resources,government regulation,and the firm's production process.

Accepted Answer

A) True 
 B)False

Question 14

Figure 15-16
  
-Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Accepted Answer

A)  $1. 
B)  $1,562.5. 
C)  $3,125. 
D)  $6,250. 
A)  $1. 
B)  $1,562.5. 
C)  $3,125. 
D)  $6,250.

Question 15

Figure 15-16
  
-Refer to Figure 15-16.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

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 16

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
  
-Refer to Table 15-8.What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Accepted Answer

A)  The firm saves $15. 
B)  $15 
C)  $30 
D)  $40 
A)  The firm saves $15. 
B)  $15 
C)  $30 
D)  $40

Question 17

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, and Panel B represents the typical demand curve for a monopoly. 
B)  Panel B represents the typical demand curve for a perfectly competitive firm, and Panel C represents the typical demand curve for a monopoly. 
C)  Panel A represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly. 
D)  Panel C represents the typical demand curve for a perfectly competitive firm, and Panel D represents the typical demand curve for a monopoly. 
A)  Panel C represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly. 
B)  Panel B represents the typical demand curve for a perfectly competitive firm, and Panel C represents the typical demand curve for a monopoly. 
C)  Panel A represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly. 
D)  Panel C represents the typical demand curve for a perfectly competitive firm, and Panel D represents the typical demand curve for a monopoly.

Question 18

A firm cannot price discriminate if it

Accepted Answer

A)  has perfect information about consumer demand. 
B)  operates in a competitive market. 
C)  faces a downward-sloping demand curve. 
D)  is regulated by the government. 
A)  has perfect information about consumer demand. 
B)  operates in a competitive market. 
C)  faces a downward-sloping demand curve. 
D)  is regulated by the government.

Question 19

The economic inefficiency of a monopolist can be measured by the

Accepted Answer

A)  number of consumers who are unable to purchase the product because of its high price. 
B)  excess profit generated by monopoly firms. 
C)  poor quality of service offered by monopoly firms. 
D)  deadweight loss. 
A)  number of consumers who are unable to purchase the product because of its high price. 
B)  excess profit generated by monopoly firms. 
C)  poor quality of service offered by monopoly firms. 
D)  deadweight loss.

Question 20

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Accepted Answer

A) True 
 B)False

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

In a monopoly market,the socially efficient quantity of output is typically higher than the profit-maximizing quantity of output for the monopolist.

For a long while,electricity producers were thought to be a classic example of a natural monopoly.People held this view because

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.What is the marginal revenue from the sale of the 2nd unit?

Perfect price discrimination describes a situation in which the monopolist

A firm cannot price discriminate if

For a monopolist,

The three main sources of barriers to entry are monopoly resources,government regulation,and the firm's production process.

Figure 15-16 -Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Figure 15-16 -Refer to Figure 15-16.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8.What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

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

A firm cannot price discriminate if it

The economic inefficiency of a monopolist can be measured by the

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

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.

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Exam 15: Monopoly.

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

In a monopoly market,the socially efficient quantity of output is typically higher than the profit-maximizing quantity of output for the monopolist.

For a long while,electricity producers were thought to be a classic example of a natural monopoly.People held this view because

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.What is the marginal revenue from the sale of the 2nd unit?

Perfect price discrimination describes a situation in which the monopolist

A firm cannot price discriminate if

For a monopolist,

The three main sources of barriers to entry are monopoly resources,government regulation,and the firm's production process.

Figure 15-16 -Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Figure 15-16 -Refer to Figure 15-16.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8.What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

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

A firm cannot price discriminate if it

The economic inefficiency of a monopolist can be measured by the

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

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