Question 1

A monopolist has less to gain from cost-saving measures in the production process when

Accepted Answer

A)  the monopoly is unregulated. 
B)  regulators use average cost pricing to set the monopolist's price. 
C)  the demand for the product of the monopolist is inelastic. 
D)  changes in the regulated price occur only after considerable delay. 
A)  the monopoly is unregulated. 
B)  regulators use average cost pricing to set the monopolist's price. 
C)  the demand for the product of the monopolist is inelastic. 
D)  changes in the regulated price occur only after considerable delay.

Question 2

Which of the following has tended to increase the competitiveness of markets in the United States during the last couple of decades?

Accepted Answer

A)  increases in transport costs 
B)  development of the Internet 
C)  decreased competition from imports 
D)  more government regulation of product quality 
A)  increases in transport costs 
B)  development of the Internet 
C)  decreased competition from imports 
D)  more government regulation of product quality

Question 3

Use the figure to answer the following question(s).
Figure 11-3
 
What is the maximum profit per month that the monopolist will be able to earn in Figure 11-3?

Accepted Answer

A)  zero 
B)  approximately $20,000 
C)  approximately $50,000 
D)  approximately $100,000 
A)  zero 
B)  approximately $20,000 
C)  approximately $50,000 
D)  approximately $100,000

Question 4

Figure 11-4  
What output would a monopolist with the demand and cost conditions depicted in Figure 11-4 produce if ordered by regulators to serve the entire market at average cost?

Accepted Answer

A)  R 
B)  S 
C)  T 
D)  U 
A)  R 
B)  S 
C)  T 
D)  U

Question 5

Under what conditions can a monopolist have potentially lower costs and possibly charge a lower price than would exist if the market were competitive?

Accepted Answer

A)  when the monopolist operates on the inelastic portion of the demand curve 
B)  when the monopolist is a profit maximizer rather than a revenue maximizer 
C)  when substantial diseconomies of scale are present 
D)  when substantial economies of scale are present 
A)  when the monopolist operates on the inelastic portion of the demand curve 
B)  when the monopolist is a profit maximizer rather than a revenue maximizer 
C)  when substantial diseconomies of scale are present 
D)  when substantial economies of scale are present

Question 6

Figure 11-20  
The firm in Figure 11-20 will have an economic

Accepted Answer

A)  profit of $85 
B)  loss of $48 
C)  profit of $132 
D)  loss of $96 
E)  loss of $34 
A)  profit of $85 
B)  loss of $48 
C)  profit of $132 
D)  loss of $96 
E)  loss of $34

Question 7

Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?

Accepted Answer

A)  an unprecedented increase in truck sales 
B)  an immediate response by GM and Dodge 
C)  a visit from the antitrust authorities of the government 
D)  a revolution from Ford stockholders 
E)  announcements by GM and Dodge that plans are underway to produce a much cheaper pick-up truck in six years 
A)  an unprecedented increase in truck sales 
B)  an immediate response by GM and Dodge 
C)  a visit from the antitrust authorities of the government 
D)  a revolution from Ford stockholders 
E)  announcements by GM and Dodge that plans are underway to produce a much cheaper pick-up truck in six years

Question 8

Even though a cartel is often profitable for its members, cartel arrangements contain the seeds of their own disintegration because

Accepted Answer

A)  a price maintained above each cartel member's marginal cost provides each member with an incentive to offer secret price reductions to attract additional customers. 
B)  the profits earned by cartel members will induce others to enter the industry. 
C)  cartel members will attempt to garner more of the total profit for themselves by cheating on their agreement with other members. 
D)  all of the above are correct. 
A)  a price maintained above each cartel member's marginal cost provides each member with an incentive to offer secret price reductions to attract additional customers. 
B)  the profits earned by cartel members will induce others to enter the industry. 
C)  cartel members will attempt to garner more of the total profit for themselves by cheating on their agreement with other members. 
D)  all of the above are correct.

Question 9

Monopolists may be able to earn profit, even in the long run, as the result of

Accepted Answer

A)  consumer ignorance. 
B)  an inelastic demand for its product. 
C)  product differentiation. 
D)  high barriers to entry. 
A)  consumer ignorance. 
B)  an inelastic demand for its product. 
C)  product differentiation. 
D)  high barriers to entry.

Question 10

Which of the following is true?

Accepted Answer

A)  Competitive forces are present even in markets with high barriers to entry. 
B)  Quality competition is an unimportant element of the competitive process. 
C)  Profitability and high prices discourage technological change and the development of substitute products. 
D)  Government regulations have substantially increased the quality of American manufacturing products in recent years. 
A)  Competitive forces are present even in markets with high barriers to entry. 
B)  Quality competition is an unimportant element of the competitive process. 
C)  Profitability and high prices discourage technological change and the development of substitute products. 
D)  Government regulations have substantially increased the quality of American manufacturing products in recent years.

Question 11

Each member of a cartel

Accepted Answer

A)  faces a temptation to cheat on the agreement because lowering its price slightly below the established price will usually increase the firm's sales and profit. 
B)  faces a temptation to cheat on the agreement because raising its price slightly above the established price will usually increase the firm's sales and profit. 
C)  has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually have no impact on the firm's sales and profit. 
D)  has no temptation to cheat on the agreement because raising its price slightly above the established price will usually decrease the firm's sales and profit. 
E)  has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually lower the firm's sales and profit. 
A)  faces a temptation to cheat on the agreement because lowering its price slightly below the established price will usually increase the firm's sales and profit. 
B)  faces a temptation to cheat on the agreement because raising its price slightly above the established price will usually increase the firm's sales and profit. 
C)  has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually have no impact on the firm's sales and profit. 
D)  has no temptation to cheat on the agreement because raising its price slightly above the established price will usually decrease the firm's sales and profit. 
E)  has no temptation to cheat on the agreement because lowering its price slightly below the established price will usually lower the firm's sales and profit.

Question 12

If pizza used to be produced in a competitive price-taker market, and now the pizza market has become a monopoly, we can expect

Accepted Answer

A)  less pizza to be sold at a higher price. 
B)  more pizza to be sold at a higher price. 
C)  less pizza to be sold at a lower price. 
D)  more pizza to be sold at a lower price. 
E)  the same amount of pizza to be sold at the same price. 
A)  less pizza to be sold at a higher price. 
B)  more pizza to be sold at a higher price. 
C)  less pizza to be sold at a lower price. 
D)  more pizza to be sold at a lower price. 
E)  the same amount of pizza to be sold at the same price.

Question 13

Which of the following provides the most secure protection for a firm with monopoly power?

Accepted Answer

A)  quality advertising 
B)  legal barriers restricting entry into the market of the monopolist 
C)  predatory pricing 
D)  limited economies of scale 
A)  quality advertising 
B)  legal barriers restricting entry into the market of the monopolist 
C)  predatory pricing 
D)  limited economies of scale

Question 14

When a regulatory agency uses marginal cost pricing to regulate a monopolist,

Accepted Answer

A)  price will exceed marginal cost. 
B)  production costs will probably exceed the total revenues of the monopolist. 
C)  marginal cost will equal average total cost. 
D)  social welfare could be improved if average cost pricing was used instead 
A)  price will exceed marginal cost. 
B)  production costs will probably exceed the total revenues of the monopolist. 
C)  marginal cost will equal average total cost. 
D)  social welfare could be improved if average cost pricing was used instead

A monopolist has less to gain from cost-saving measures in the production process when

Which of the following has tended to increase the competitiveness of markets in the United States during the last couple of decades?

Use the figure to answer the following question(s). Figure 11-3 What is the maximum profit per month that the monopolist will be able to earn in Figure 11-3?

Figure 11-4 What output would a monopolist with the demand and cost conditions depicted in Figure 11-4 produce if ordered by regulators to serve the entire market at average cost?

Under what conditions can a monopolist have potentially lower costs and possibly charge a lower price than would exist if the market were competitive?

Figure 11-20 The firm in Figure 11-20 will have an economic

Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?

Even though a cartel is often profitable for its members, cartel arrangements contain the seeds of their own disintegration because

Monopolists may be able to earn profit, even in the long run, as the result of

Which of the following is true?

Each member of a cartel

If pizza used to be produced in a competitive price-taker market, and now the pizza market has become a monopoly, we can expect

Which of the following provides the most secure protection for a firm with monopoly power?

When a regulatory agency uses marginal cost pricing to regulate a monopolist,

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

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Exam 11: Price-Searcher Markets With High Entry Barriers

A monopolist has less to gain from cost-saving measures in the production process when

Which of the following has tended to increase the competitiveness of markets in the United States during the last couple of decades?

Use the figure to answer the following question(s). Figure 11-3 What is the maximum profit per month that the monopolist will be able to earn in Figure 11-3?

Figure 11-4 What output would a monopolist with the demand and cost conditions depicted in Figure 11-4 produce if ordered by regulators to serve the entire market at average cost?

Under what conditions can a monopolist have potentially lower costs and possibly charge a lower price than would exist if the market were competitive?

Figure 11-20 The firm in Figure 11-20 will have an economic

Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect to see?

Even though a cartel is often profitable for its members, cartel arrangements contain the seeds of their own disintegration because

Monopolists may be able to earn profit, even in the long run, as the result of

Which of the following is true?

Each member of a cartel

If pizza used to be produced in a competitive price-taker market, and now the pizza market has become a monopoly, we can expect

Which of the following provides the most secure protection for a firm with monopoly power?

When a regulatory agency uses marginal cost pricing to regulate a monopolist,

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Applying the Basics: Special Topics in Economics

Filters