Question 1

Which of the following firms is most likely to be a monopoly?

Accepted Answer

A)  local restaurant 
B)  local distributor of natural gas 
C)  local book store 
D)  clothing store 
E)  local bank 
A)  local restaurant 
B)  local distributor of natural gas 
C)  local book store 
D)  clothing store 
E)  local bank

Question 2

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.In order to maximize profit,the Busy Bee produces ________ hamburgers per hour and sets a price of ________ per hamburger.

Accepted Answer

A)  20; $3.00 
B)  20; $1.00 
C)  30; $2.00 
D)  30; $4.00 
E)  50; $5.00 
A)  20; $3.00 
B)  20; $1.00 
C)  30; $2.00 
D)  30; $4.00 
E)  50; $5.00

Question 3

A major characteristic of monopoly is

Accepted Answer

A)  a single seller of a product. 
B)  multiple sellers of a product. 
C)  two sellers of a product. 
D)  a few sellers of differentiated products. 
E)  a few sellers of an identical product. 
A)  a single seller of a product. 
B)  multiple sellers of a product. 
C)  two sellers of a product. 
D)  a few sellers of differentiated products. 
E)  a few sellers of an identical product.

Question 4

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the price consumers pay for food

Accepted Answer

A)  does not change, that is, it remains constant. 
B)  falls. 
C)  rises. 
D)  might rise or fall depending on whether the demand for food is elastic or inelastic. 
E)  might rise or fall depending on whether the monopoly's marginal revenue curve lies above or below its demand curve. 
A)  does not change, that is, it remains constant. 
B)  falls. 
C)  rises. 
D)  might rise or fall depending on whether the demand for food is elastic or inelastic. 
E)  might rise or fall depending on whether the monopoly's marginal revenue curve lies above or below its demand curve.

Question 5

Comparing single-price monopoly to perfect competition,monopoly

Accepted Answer

A)  increases the amount of consumer surplus. 
B)  has the same amount of consumer surplus. 
C)  has no consumer surplus. 
D)  decreases the amount of consumer surplus. 
E)  decreases the amount of economic profit. 
A)  increases the amount of consumer surplus. 
B)  has the same amount of consumer surplus. 
C)  has no consumer surplus. 
D)  decreases the amount of consumer surplus. 
E)  decreases the amount of economic profit.

Question 6

Give an example of price discrimination.

Accepted Answer

Price discrimination occurs wh

Question 7

Compared to a single-price monopoly,when a monopoly can perfectly price discriminate,the deadweight loss

Accepted Answer

A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  becomes infinite. 
E)  probably changes, but more information is needed to determine if it increases, decreases, or remains constant. 
A)  increases. 
B)  decreases. 
C)  remains the same. 
D)  becomes infinite. 
E)  probably changes, but more information is needed to determine if it increases, decreases, or remains constant.

Question 8

Price discrimination is prevented in situations where

Accepted Answer

A)  customers can resell the good. 
B)  firms have monopolies. 
C)  there are legal barriers to entry. 
D)  there are no close substitutes for the good or service. 
E)  customers have different willingnesses to pay for the good. 
A)  customers can resell the good. 
B)  firms have monopolies. 
C)  there are legal barriers to entry. 
D)  there are no close substitutes for the good or service. 
E)  customers have different willingnesses to pay for the good.

Question 9

In the figure below,draw and label the demand and cost curves of a monopoly.Identify the quantity a single-price monopoly will produce by labeling it Qm and identify the price by labeling it Pm.

Accepted Answer

@#IMG-DLM& The compl

Question 10

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.What quantity will the Busy Bee produce to maximize its profit?

Accepted Answer

A)  20 hamburgers per hour 
B)  30 hamburgers per hour 
C)  50 hamburgers per hour 
D)  0 hamburgers per hour. 
E)  10 hamburgers per hour 
A)  20 hamburgers per hour 
B)  30 hamburgers per hour 
C)  50 hamburgers per hour 
D)  0 hamburgers per hour. 
E)  10 hamburgers per hour

Question 11

$$\begin{array} { c c } 
\text { Price(dollars) } & \text { Quantity(units) } \
6 & 1 \
5 & 2 \
4 & 3 \
3 & 4 \
2 & 5 \
1 & 6 \
\hline
\end{array}$$
-The above table gives the demand schedule for a monopoly.The demand is elastic at all prices between

Accepted Answer

A)  $6 and $1. 
B)  $5 and $1. 
C)  $3 and $1. 
D)  $6 and $4. 
E)  $4 and $3. 
A)  $6 and $1. 
B)  $5 and $1. 
C)  $3 and $1. 
D)  $6 and $4. 
E)  $4 and $3.

Question 12

Why will a profit-maximizing,single-price monopoly NEVER produce the amount of output that maximizes its total revenue?

Accepted Answer

When total revenue is at its maximum,the

Question 13

$$\begin{array} { c c c c } 
\begin{array} { c } 
\text { Quantity } \
\text { (units) }
\end{array} & \begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Marginal revenue } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Marginal cost } \
\text { (dollars) }
\end{array} \
\hline 1 & 22 & 20 & 6 \
2 & 20 & 16 & 8 \
3 & 18 & 12 & 12 \
4 & 16 & 8 & 18 \
5 & 14 & 4 & 28 \
6 & 12 & 0 & 40 \
7 & 10 & - 4 & 54 \
8 & 8 & - 8 & 70 \
\hline
\end{array}$$
-A single-price monopoly has the demand and marginal cost schedules given in the above table.What is the profit-maximizing level of output and price?

Accepted Answer

The profit-maximizing output i

Question 14

-Ron's Hamburger Joint is the only restaurant in town.The above figure represents Ron's cost,the market demand,and marginal revenue curves.Ron operates as a single-price monopoly.
a.How many hamburgers does Ron produce?
b.What price does Ron charge for a hamburger?
c.What is Ron's total revenue?
d.What is his total cost?
e.What is Ron's economic profit?

Accepted Answer

a.Ron produces 20 hamburgers p

Question 15

One way a company can cover its costs and,at the same time,obey a marginal cost pricing rule is by

Accepted Answer

A)  choosing output levels according to the profit-maximizing rule. 
B)  using price discrimination. 
C)  increasing production. 
D)  decreasing production. 
E)  decreasing its marginal cost but not changing its average total cost. 
A)  choosing output levels according to the profit-maximizing rule. 
B)  using price discrimination. 
C)  increasing production. 
D)  decreasing production. 
E)  decreasing its marginal cost but not changing its average total cost.

Question 16

Suppose a single-price monopoly sells 3 units of a good at $20 per unit.If the monopoly sells 4 units,the total revenue increases to $72.What is the marginal revenue of the fourth unit?

Accepted Answer

A)  $52 
B)  $18 
C)  $60 
D)  $12 
E)  $20 
A)  $52 
B)  $18 
C)  $60 
D)  $12 
E)  $20

Question 17

If a firm successfully price discriminates,it increases
i.consumer surplus.
ii.deadweight loss.
iii.economic profit.

Accepted Answer

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

Question 18

Compare the outcome in a market with a single-price monopoly to that in a perfectly competitive market.

Accepted Answer

The monopoly charges a higher price and

Question 19

The good produced by a monopoly

Accepted Answer

A)  has perfect substitutes. 
B)  has no substitutes at all. 
C)  has no close substitutes. 
D)  can be easily duplicated. 
E)  must be unable to be resold. 
A)  has perfect substitutes. 
B)  has no substitutes at all. 
C)  has no close substitutes. 
D)  can be easily duplicated. 
E)  must be unable to be resold.

Question 20

Describe the three general types of barriers.

Accepted Answer

Barriers to entry can be divided into le

Which of the following firms is most likely to be a monopoly?

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.In order to maximize profit,the Busy Bee produces hamburgers per hour and sets a price of per hamburger.

A major characteristic of monopoly is

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the price consumers pay for food

Comparing single-price monopoly to perfect competition,monopoly

Give an example of price discrimination.

Compared to a single-price monopoly,when a monopoly can perfectly price discriminate,the deadweight loss

Price discrimination is prevented in situations where

In the figure below,draw and label the demand and cost curves of a monopoly.Identify the quantity a single-price monopoly will produce by labeling it Qm and identify the price by labeling it Pm.

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.What quantity will the Busy Bee produce to maximize its profit?

Price(dollars) Quantity(units) 6 1 5 2 4 3 3 4 2 5 1 6 -The above table gives the demand schedule for a monopoly.The demand is elastic at all prices between

Why will a profit-maximizing,single-price monopoly NEVER produce the amount of output that maximizes its total revenue?

One way a company can cover its costs and,at the same time,obey a marginal cost pricing rule is by

Suppose a single-price monopoly sells 3 units of a good at $20 per unit.If the monopoly sells 4 units,the total revenue increases to $72.What is the marginal revenue of the fourth unit?

If a firm successfully price discriminates,it increases i.consumer surplus. ii.deadweight loss. iii.economic profit.

Compare the outcome in a market with a single-price monopoly to that in a perfectly competitive market.

The good produced by a monopoly

Describe the three general types of barriers.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 16: Monopoly

Which of the following firms is most likely to be a monopoly?

A major characteristic of monopoly is

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the price consumers pay for food

Comparing single-price monopoly to perfect competition,monopoly

Give an example of price discrimination.

Compared to a single-price monopoly,when a monopoly can perfectly price discriminate,the deadweight loss

Price discrimination is prevented in situations where

In the figure below,draw and label the demand and cost curves of a monopoly.Identify the quantity a single-price monopoly will produce by labeling it Qm and identify the price by labeling it Pm.

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.What quantity will the Busy Bee produce to maximize its profit?

Price(dollars) Quantity(units) 6 1 5 2 4 3 3 4 2 5 1 6 -The above table gives the demand schedule for a monopoly.The demand is elastic at all prices between

Why will a profit-maximizing,single-price monopoly NEVER produce the amount of output that maximizes its total revenue?

One way a company can cover its costs and,at the same time,obey a marginal cost pricing rule is by

Suppose a single-price monopoly sells 3 units of a good at $20 per unit.If the monopoly sells 4 units,the total revenue increases to $72.What is the marginal revenue of the fourth unit?

If a firm successfully price discriminates,it increases i.consumer surplus. ii.deadweight loss. iii.economic profit.

Compare the outcome in a market with a single-price monopoly to that in a perfectly competitive market.

The good produced by a monopoly

Describe the three general types of barriers.

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters