Question 1

Compared to a perfectly competitive firm with the same cost structure,a monopoly firm will charge a:

Accepted Answer

A) higher price and sell more. 
B) lower price and sell more. 
C) higher price and sell less. 
D) lower price and sell less. 
E) similar price and sell the same. 
A) higher price and sell more. 
B) lower price and sell more. 
C) higher price and sell less. 
D) lower price and sell less. 
E) similar price and sell the same.

Question 2

A monopoly firm can sell its fourth unit of output for a price of $250.In order to sell more than five units,it must expect to receive a price:

Accepted Answer

A) equal to $250. 
B) greater than $250. 
C) less than $250. 
D) equal to $340. 
A) equal to $250. 
B) greater than $250. 
C) less than $250. 
D) equal to $340.

Question 3

One necessary condition for effective price discrimination is:

Accepted Answer

A) identical tastes among buyers. 
B) difference in the price elasticity of demand among buyers. 
C) a single, homogeneous market. 
D) two or more markets with easy resale of products between them. 
A) identical tastes among buyers. 
B) difference in the price elasticity of demand among buyers. 
C) a single, homogeneous market. 
D) two or more markets with easy resale of products between them.

Question 4

Both a perfectly competitive firm and a monopolist:

Accepted Answer

A) always earn an economic profit. 
B) maximise profit by setting marginal cost equal to marginal revenue. 
C) maximise profit by setting marginal cost equal to average total cost. 
D) are price takers. 
A) always earn an economic profit. 
B) maximise profit by setting marginal cost equal to marginal revenue. 
C) maximise profit by setting marginal cost equal to average total cost. 
D) are price takers.

Question 5

A monopolist maximises total revenue.

Accepted Answer

A) True 
 B)False

Question 6

If price is less than average variable cost,a monopoly should shut down.

Accepted Answer

A) True 
 B)False

Question 7

Predatory pricing in monopolies is the practice of:

Accepted Answer

A) increasing prices to prey on consumers. 
B) increasing prices to raise revenue. 
C) decreasing prices to deter potential competitors. 
D) decreasing prices to deter potential consumers. 
A) increasing prices to prey on consumers. 
B) increasing prices to raise revenue. 
C) decreasing prices to deter potential competitors. 
D) decreasing prices to deter potential consumers.

Question 8

Exhibit 8-2 Demand and cost information for a monopoly
  
-Refer to Exhibit 8-2.Using the rule that focuses on the marginal approach to maximising profits,the monopolist maximises profit by choosing price equal to:

Accepted Answer

A) $0. 
B) $10. 
C) $20. 
D) $30. 
E) $40. 
A) $0. 
B) $10. 
C) $20. 
D) $30. 
E) $40.

Question 9

Exhibit 8-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine
  
-In Exhibit 8-3,what is the maximum hourly profit that GeneTech can earn from its vaccine?

Accepted Answer

A) $1500. 
B) $3000. 
C) $4500. 
D) $10 500. 
A) $1500. 
B) $3000. 
C) $4500. 
D) $10 500.

Question 10

Monopolies can charge any price they like and sell as much as they want.

Accepted Answer

A) True 
 B)False

Question 11

What should a profit-maximising monopolist do if she is currently producing where MC < MR?

Accepted Answer

A) Increase output until MC = MR. 
B) Decrease output until MC = MR. 
C) Shut down in the long run. 
D) Keep producing at this level. 
E) Operate only in the short run. 
A) Increase output until MC = MR. 
B) Decrease output until MC = MR. 
C) Shut down in the long run. 
D) Keep producing at this level. 
E) Operate only in the short run.

Question 12

A monopolist will operate in the short run if which of the following is above average variable cost?

Accepted Answer

A) Marginal cost. 
B) Marginal revenue. 
C) Price. 
D) Average total cost. 
A) Marginal cost. 
B) Marginal revenue. 
C) Price. 
D) Average total cost.

Question 13

The only dentist in a small isolated country town is an example of a/an:

Accepted Answer

A) oligopoly. 
B) monopolistically competitive firm. 
C) monopoly. 
D) competitive firm. 
A) oligopoly. 
B) monopolistically competitive firm. 
C) monopoly. 
D) competitive firm.

Question 14

Suppose a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves.If the price is between its average variable cost and average total cost curves,the firm will:

Accepted Answer

A) earn an economic profit. 
B) stay in operation in the short run, but shut down in the long run if demand remains the same. 
C) shut down. 
D) charge higher price. 
A) earn an economic profit. 
B) stay in operation in the short run, but shut down in the long run if demand remains the same. 
C) shut down. 
D) charge higher price.

Question 15

A monopolist is always earning economic profits but a perfectly competitive firm is not.

Accepted Answer

A) True 
 B)False

Question 16

A monopoly earns the most profit by charging a price where demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 17

Exhibit 8-2 Demand and cost information for a monopoly
  
-The marginal revenue of the third unit of output in Exhibit 8-2 is:

Accepted Answer

A) -10. 
B) 10. 
C) 20. 
D) 30. 
E) 40. 
A) -10. 
B) 10. 
C) 20. 
D) 30. 
E) 40.

Question 18

To maximise its profit,a monopoly should choose a price where demand is:

Accepted Answer

A) unitary elastic. 
B) inelastic. 
C) elastic. 
D) vertical. 
A) unitary elastic. 
B) inelastic. 
C) elastic. 
D) vertical.

Question 19

If a firm is able to price-discriminate:

Accepted Answer

A) some groups of the population will benefit. 
B) the monopolist earns a lower profit but all consumers gain. 
C) all consumers are worse off. 
D) both the monopolist and the consumer are worse off. 
A) some groups of the population will benefit. 
B) the monopolist earns a lower profit but all consumers gain. 
C) all consumers are worse off. 
D) both the monopolist and the consumer are worse off.

Question 20

If a monopoly holds a patent over a good,it is often because they paid the most money for it.

Accepted Answer

A) True 
 B)False

Compared to a perfectly competitive firm with the same cost structure,a monopoly firm will charge a:

A monopoly firm can sell its fourth unit of output for a price of $250.In order to sell more than five units,it must expect to receive a price:

One necessary condition for effective price discrimination is:

Both a perfectly competitive firm and a monopolist:

A monopolist maximises total revenue.

If price is less than average variable cost,a monopoly should shut down.

Predatory pricing in monopolies is the practice of:

Exhibit 8-2 Demand and cost information for a monopoly -Refer to Exhibit 8-2.Using the rule that focuses on the marginal approach to maximising profits,the monopolist maximises profit by choosing price equal to:

Exhibit 8-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 8-3,what is the maximum hourly profit that GeneTech can earn from its vaccine?

Monopolies can charge any price they like and sell as much as they want.

What should a profit-maximising monopolist do if she is currently producing where MC < MR?

A monopolist will operate in the short run if which of the following is above average variable cost?

The only dentist in a small isolated country town is an example of a/an:

Suppose a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves.If the price is between its average variable cost and average total cost curves,the firm will:

A monopolist is always earning economic profits but a perfectly competitive firm is not.

A monopoly earns the most profit by charging a price where demand is inelastic.

Exhibit 8-2 Demand and cost information for a monopoly -The marginal revenue of the third unit of output in Exhibit 8-2 is:

To maximise its profit,a monopoly should choose a price where demand is:

If a firm is able to price-discriminate:

If a monopoly holds a patent over a good,it is often because they paid the most money for it.

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

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Exam 8: Monopoly

Compared to a perfectly competitive firm with the same cost structure,a monopoly firm will charge a:

A monopoly firm can sell its fourth unit of output for a price of $250.In order to sell more than five units,it must expect to receive a price:

One necessary condition for effective price discrimination is:

Both a perfectly competitive firm and a monopolist:

A monopolist maximises total revenue.

If price is less than average variable cost,a monopoly should shut down.

Predatory pricing in monopolies is the practice of:

Exhibit 8-2 Demand and cost information for a monopoly -Refer to Exhibit 8-2.Using the rule that focuses on the marginal approach to maximising profits,the monopolist maximises profit by choosing price equal to:

Exhibit 8-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 8-3,what is the maximum hourly profit that GeneTech can earn from its vaccine?

Monopolies can charge any price they like and sell as much as they want.

What should a profit-maximising monopolist do if she is currently producing where MC < MR?

A monopolist will operate in the short run if which of the following is above average variable cost?

The only dentist in a small isolated country town is an example of a/an:

Suppose a monopolist charges a price corresponding to the intersection of the marginal cost and marginal revenue curves.If the price is between its average variable cost and average total cost curves,the firm will:

A monopolist is always earning economic profits but a perfectly competitive firm is not.

A monopoly earns the most profit by charging a price where demand is inelastic.

Exhibit 8-2 Demand and cost information for a monopoly -The marginal revenue of the third unit of output in Exhibit 8-2 is:

To maximise its profit,a monopoly should choose a price where demand is:

If a firm is able to price-discriminate:

If a monopoly holds a patent over a good,it is often because they paid the most money for it.

Thinking like an economist

Production possibilities and opportunity cost

Market demand and supply

Markets in action

Elasticity of demand and supply

Production costs

Perfect competition

Monopolistic competition and oligopoly

Policy issues: resource taxes and climate change

Measuring the size of the economy

Business cycles and economic growth

Inflation and unemployment

A simple model of the macro economy

The monetary and financial system

Macroeconomic policy I: monetary policy

Macroeconomic policy II: fiscal policy

International trade and finance

Applying graphs to economics

Filters