Question 1

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

Accepted Answer

A)  $500. 
B)  $1,000. 
C)  $2,000. 
D)  $4,000. 
A)  $500. 
B)  $1,000. 
C)  $2,000. 
D)  $4,000.

Question 2

When a natural monopoly exists,it is

Accepted Answer

A)  always cost effective for government-owned firms to produce the product. 
B)  never cost effective for one firm to produce the product. 
C)  always cost effective for two or more private firms to produce the product. 
D)  never cost effective for two or more private firms to produce the product. 
A)  always cost effective for government-owned firms to produce the product. 
B)  never cost effective for one firm to produce the product. 
C)  always cost effective for two or more private firms to produce the product. 
D)  never cost effective for two or more private firms to produce the product.

Question 3

A profit-maximizing monopolist charges a price of $14.The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7.What is the monopolist's profit?

Accepted Answer

A)  $90 
B)  $105 
C)  $180 
D)  Not enough information is given to determine the answer. 
A)  $90 
B)  $105 
C)  $180 
D)  Not enough information is given to determine the answer.

Question 4

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 4th unit?

Accepted Answer

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

Question 5

When a monopolist increases the amount of output that it produces and sells,average revenue

Accepted Answer

A)  increases, and marginal revenue increases. 
B)  increases, and marginal revenue decreases. 
C)  decreases, and marginal revenue increases. 
D)  decreases, and marginal revenue decreases. 
A)  increases, and marginal revenue increases. 
B)  increases, and marginal revenue decreases. 
C)  decreases, and marginal revenue increases. 
D)  decreases, and marginal revenue decreases.

Question 6

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Accepted Answer

A)  consumer surplus 
B)  deadweight loss 
C)  market power 
D)  arbitrage 
A)  consumer surplus 
B)  deadweight loss 
C)  market power 
D)  arbitrage

Question 7

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Accepted Answer

A)  preventing mergers through antitrust laws 
B)  regulating the prices that monopolies can charge 
C)  doing nothing 
D)  None of the above strategies is preferred. Each is a viable strategy. 
A)  preventing mergers through antitrust laws 
B)  regulating the prices that monopolies can charge 
C)  doing nothing 
D)  None of the above strategies is preferred. Each is a viable strategy.

Question 8

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Accepted Answer

A) True 
 B)False

Question 9

Figure 15-4
  
-Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)  P4 x Q3. 
B)  (P4-P2) x Q3. 
C)  (P4-P1) x Q3. 
D)  (P5-P0) x Q1. 
A)  P4 x Q3. 
B)  (P4-P2) x Q3. 
C)  (P4-P1) x Q3. 
D)  (P5-P0) x Q1.

Question 10

If a product can be produced by a natural monopoly,society will benefit in the form of lower prices if the monopolist is broken up into several smaller firms.

Accepted Answer

A) True 
 B)False

Question 11

When a monopolist increases the quantity that it sells,price decreases,which,all else equal,decreases total revenue; this is called the price effect.

Accepted Answer

A) True 
 B)False

Question 12

The socially efficient quantity is found where the demand curve intersects the marginal cost curve.

Accepted Answer

A) True 
 B)False

Question 13

When a firm experiences continually declining average total costs,

Accepted Answer

A)  the firm is a price taker. 
B)  society is better served by having one firm supply the product. 
C)  the firm will earn higher profits than if average total costs are increasing. 
D)  All of the above are correct. 
A)  the firm is a price taker. 
B)  society is better served by having one firm supply the product. 
C)  the firm will earn higher profits than if average total costs are increasing. 
D)  All of the above are correct.

Question 14

Monopolies are socially inefficient because the price they charge is

Accepted Answer

A)  equal to marginal revenue. 
B)  above marginal cost. 
C)  equal to demand. 
D)  above demand. 
A)  equal to marginal revenue. 
B)  above marginal cost. 
C)  equal to demand. 
D)  above demand.

Question 15

A rational pricing strategy for a profit-maximizing monopolist is

Accepted Answer

A)  price discrimination. 
B)  price segregation. 
C)  synergy pricing. 
D)  average cost pricing. 
A)  price discrimination. 
B)  price segregation. 
C)  synergy pricing. 
D)  average cost pricing.

Question 16

Table 15-14
The following table gives information on the price, quantity, and total cost of production for a monopolist.
  
-Refer to Table 15-14.At what price does marginal revenue equal marginal cost?

Accepted Answer

A)  $5 
B)  $4 
C)  $3 
D)  $2 
A)  $5 
B)  $4 
C)  $3 
D)  $2

Question 17

The reason to regulate utilities instead of using antitrust laws to promote competition is that a utility is usually a

Accepted Answer

A)  profit-maximizing monopoly. 
B)  producer of externalities. 
C)  revenue-maximizing monopoly. 
D)  natural monopoly. 
A)  profit-maximizing monopoly. 
B)  producer of externalities. 
C)  revenue-maximizing monopoly. 
D)  natural monopoly.

Question 18

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve.When selling the 100ᵗʰ widget,the firm will always receive

Accepted Answer

A)  less marginal revenue on the 100th widget than it received on the 99th widget. 
B)  more average revenue on the 100th widget than it received on the 99th widget. 
C)  more total revenue on the 100 widgets than it received on the first 99 widgets. 
D)  a lower average cost per unit at 100 units output than at 99 units of output. 
A)  less marginal revenue on the 100th widget than it received on the 99th widget. 
B)  more average revenue on the 100th widget than it received on the 99th widget. 
C)  more total revenue on the 100 widgets than it received on the first 99 widgets. 
D)  a lower average cost per unit at 100 units output than at 99 units of output.

Question 19

Price discrimination is prohibited by antitrust laws.

Accepted Answer

A) True 
 B)False

Question 20

Table 15-9
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-9.What is the marginal cost of the 4th unit?

Accepted Answer

A)  $4 
B)  $14 
C)  $31 
D)  $62 
A)  $4 
B)  $14 
C)  $31 
D)  $62

Exam 15: Monopoly.

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

When a natural monopoly exists,it is

A profit-maximizing monopolist charges a price of $14.The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7.What is the monopolist's profit?

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 4th unit?

When a monopolist increases the amount of output that it produces and sells,average revenue

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

If a product can be produced by a natural monopoly,society will benefit in the form of lower prices if the monopolist is broken up into several smaller firms.

When a monopolist increases the quantity that it sells,price decreases,which,all else equal,decreases total revenue; this is called the price effect.

The socially efficient quantity is found where the demand curve intersects the marginal cost curve.

When a firm experiences continually declining average total costs,

Monopolies are socially inefficient because the price they charge is

A rational pricing strategy for a profit-maximizing monopolist is

Table 15-14 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-14.At what price does marginal revenue equal marginal cost?

The reason to regulate utilities instead of using antitrust laws to promote competition is that a utility is usually a

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve.When selling the 100ᵗʰ widget,the firm will always receive

Price discrimination is prohibited by antitrust laws.

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9.What is the marginal cost of the 4th unit?

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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