Question 1

Compared to a firm under perfect competition,a monopolist ________.

Accepted Answer

A)  charges less and produces less 
B)  charges less and produces more 
C)  charges more and produces less 
D)  charges more and produces more 
A)  charges less and produces less 
B)  charges less and produces more 
C)  charges more and produces less 
D)  charges more and produces more

Question 2

The following figure shows the marginal revenue (MR), marginal cost (MC), and demand (D) curves for a firm operating as a monopoly.
  
-Refer to the figure above.If the monopolist sets its price to the optimal price,what would be its profits?

Accepted Answer

A)  P₃ Q₃ 
B)  P₂ Q₂ 
C)  The area below the demand curve and above P₁. 
D)  (P₁ P₄) Q₁ 
A)  P₃ Q₃ 
B)  P₂ Q₂ 
C)  The area below the demand curve and above P₁. 
D)  (P₁ P₄) Q₁

Question 3

The following figure shows the market demand curve for penicillin, an antibiotic medicine. Initially, the market was supplied by perfectly competitive firms. Later, the government granted the exclusive right to produce and sell penicillin to one firm. The figure also shows the marginal revenue curve (MR) of the firm once it begins to operate as a monopoly. The marginal cost is constant at $3, irrespective of the market structure.
  
-Refer to the figure above.What is the consumer surplus when the market is perfectly competitive?

Accepted Answer

A)  $30 
B)  $60 
C)  $90 
D)  $180 
A)  $30 
B)  $60 
C)  $90 
D)  $180

Question 4

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day.
  
-Refer to the scenario above.What is Mr.Olivander's marginal revenue when he sells three wands?

Accepted Answer

A)  $55 
B)  $130 
C)  $30 
D)  $35 
A)  $55 
B)  $130 
C)  $30 
D)  $35

Question 5

During the early twentieth century,Alcoa bought up several bauxite (a source of aluminum ore)mines in the Caribbean.This is an example of ________.

Accepted Answer

A)  natural market power 
B)  low barriers to entry 
C)  legal market power 
D)  a patent 
A)  natural market power 
B)  low barriers to entry 
C)  legal market power 
D)  a patent

Question 6

Natural barriers to entry ________.

Accepted Answer

A)  include patent laws and exclusive franchises 
B)  most commonly arise through economies of scale 
C)  result from an increasing long-run average cost curve 
D)  must be sustained by government regulation 
A)  include patent laws and exclusive franchises 
B)  most commonly arise through economies of scale 
C)  result from an increasing long-run average cost curve 
D)  must be sustained by government regulation

Question 7

Compared to a perfectly competitive industry,________ in a monopoly.

Accepted Answer

A)  both consumer surplus and social surplus are larger 
B)  consumer surplus is lower but social surplus is larger 
C)  both consumer surplus and social surplus are smaller 
D)  consumer surplus is higher but social surplus is smaller 
A)  both consumer surplus and social surplus are larger 
B)  consumer surplus is lower but social surplus is larger 
C)  both consumer surplus and social surplus are smaller 
D)  consumer surplus is higher but social surplus is smaller

Question 8

To maximize profits,the monopolist should charge a price of ________ per unit.

Accepted Answer

A)  $90 
B)  $80 
C)  $70 
D)  $50 
A)  $90 
B)  $80 
C)  $70 
D)  $50

Question 9

The following figure shows the marginal revenue (MR) and average total cost (ATC) and marginal cost (MC) curves of a monopolist.
  
-Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus under the competitive market would have been ________.

Accepted Answer

A)  $30; $64 
B)  $15; $64 
C)  $60; $144 
D)  $15; $144 
A)  $30; $64 
B)  $15; $64 
C)  $60; $144 
D)  $15; $144

Question 10

The following figure shows the revenue and cost curves of a monopolist.
  
-Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus in the competitive circumstance would have been ________.

Accepted Answer

A)  $25; $144 
B)  $25; $169 
C)  $50; $144 
D)  $35; $100 
A)  $25; $144 
B)  $25; $169 
C)  $50; $144 
D)  $35; $100

Question 11

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day.
  
-Refer to the scenario above.What is Mr.Olivander's total revenue when he charges a price of $65 for his wands?

Accepted Answer

A)  $65 
B)  $130 
C)  $30 
D)  $170 
A)  $65 
B)  $130 
C)  $30 
D)  $170

Question 12

If the marginal cost of a monopolist exceeds its marginal revenue,________.

Accepted Answer

A)  additional production reduces profits 
B)  additional production enhances profits 
C)  the difference between the marginal revenue curve and demand curve is at its highest 
D)  the difference between the marginal revenue curve and demand curve is at its lowest 
A)  additional production reduces profits 
B)  additional production enhances profits 
C)  the difference between the marginal revenue curve and demand curve is at its highest 
D)  the difference between the marginal revenue curve and demand curve is at its lowest

Question 13

Suppose a cereal manufacturer offers one of its cereal brands in two sizes: a 12 ounce box and a 40 ounce box.The per-ounce price of cereal in the 40 ounce box is much less than the per-ounce price charged for the 12 ounce box,and this price differential is not a function of differences in packaging costs.This is an example of ________.

Accepted Answer

A)  first-degree price discrimination 
B)  second-degree price discrimination 
C)  third-degree price discrimination 
D)  simple monopoly pricing 
A)  first-degree price discrimination 
B)  second-degree price discrimination 
C)  third-degree price discrimination 
D)  simple monopoly pricing

Question 14

The following figure shows the revenue and cost curves of a monopolist.
  
-Refer to the figure above.The output produced in this market is ________ units,while the output produced under a comparable perfectly competitive market is ________ units.

Accepted Answer

A)  15; 30 
B)  10; 24 
C)  13; 26 
D)  10; 26 
A)  15; 30 
B)  10; 24 
C)  13; 26 
D)  10; 26

Question 15

In practice,price discrimination is never perfect.Why?

Accepted Answer

There are two reasons price discriminati

Question 16

The following figure is a supply-demand diagram that characterizes the demand, marginal revenue, and cost curves for a profit-maximizing monopolist.
  
-Refer to the figure above.Under monopoly,deadweight loss is ________.

Accepted Answer

A)  zero 
B)  Areas B + C 
C)  Area D 
D)  Areas D + E 
A)  zero 
B)  Areas B + C 
C)  Area D 
D)  Areas D + E

Question 17

Which of the following is an example of a good produced under monopoly?

Accepted Answer

A)  Steak at a streakhouse 
B)  A Mac laptop 
C)  Diet Coke 
D)  A patented drug 
A)  Steak at a streakhouse 
B)  A Mac laptop 
C)  Diet Coke 
D)  A patented drug

Question 18

The following figure shows the costs and revenue curves of a firm in a monopoly market.
  
-Refer to the figure above.If the government decides to regulate this market at the socially optimal price level,the profit of this monopolist will equal ________.

Accepted Answer

A)  zero 
B)  -$26 
C)  $26 
D)  -$12 
A)  zero 
B)  -$26 
C)  $26 
D)  -$12

Question 19

The following figure shows the revenue and cost curves of a monopolist.
  
-Refer to the figure above.Compared to a competitive market,how much is the deadweight loss of this monopoly?

Accepted Answer

A)  $64 
B)  $25 
C)  $144 
D)  $50 
A)  $64 
B)  $25 
C)  $144 
D)  $50

Question 20

At a certain level of production,the average total cost faced by a monopolist is $6 and the marginal cost faced by the monopolist is $4.If the government decides to regulate the market by setting the price at the efficient price,the good will be sold at a price of ________.

Accepted Answer

A)  $2 per unit 
B)  $4 per unit 
C)  $6 per unit 
D)  $10 per unit 
A)  $2 per unit 
B)  $4 per unit 
C)  $6 per unit 
D)  $10 per unit

Compared to a firm under perfect competition,a monopolist ________.

The following figure shows the marginal revenue (MR), marginal cost (MC), and demand (D) curves for a firm operating as a monopoly. -Refer to the figure above.If the monopolist sets its price to the optimal price,what would be its profits?

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day. -Refer to the scenario above.What is Mr.Olivander's marginal revenue when he sells three wands?

During the early twentieth century,Alcoa bought up several bauxite (a source of aluminum ore)mines in the Caribbean.This is an example of ________.

Natural barriers to entry ________.

Compared to a perfectly competitive industry,________ in a monopoly.

To maximize profits,the monopolist should charge a price of ________ per unit.

The following figure shows the marginal revenue (MR) and average total cost (ATC) and marginal cost (MC) curves of a monopolist. -Refer to the figure above.The consumer surplus in this market is ,while the consumer surplus under the competitive market would have been .

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.The consumer surplus in this market is ,while the consumer surplus in the competitive circumstance would have been .

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day. -Refer to the scenario above.What is Mr.Olivander's total revenue when he charges a price of $65 for his wands?

If the marginal cost of a monopolist exceeds its marginal revenue,________.

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.The output produced in this market is units,while the output produced under a comparable perfectly competitive market is units.

In practice,price discrimination is never perfect.Why?

The following figure is a supply-demand diagram that characterizes the demand, marginal revenue, and cost curves for a profit-maximizing monopolist. -Refer to the figure above.Under monopoly,deadweight loss is ________.

Which of the following is an example of a good produced under monopoly?

The following figure shows the costs and revenue curves of a firm in a monopoly market. -Refer to the figure above.If the government decides to regulate this market at the socially optimal price level,the profit of this monopolist will equal ________.

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.Compared to a competitive market,how much is the deadweight loss of this monopoly?

At a certain level of production,the average total cost faced by a monopolist is $6 and the marginal cost faced by the monopolist is $4.If the government decides to regulate the market by setting the price at the efficient price,the good will be sold at a price of ________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Markets for Factors of Production

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Auctions and Bargaining

Social Economics

Filters

Exam 12: Monopoly

Compared to a firm under perfect competition,a monopolist ________.

The following figure shows the marginal revenue (MR), marginal cost (MC), and demand (D) curves for a firm operating as a monopoly. -Refer to the figure above.If the monopolist sets its price to the optimal price,what would be its profits?

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day. -Refer to the scenario above.What is Mr.Olivander's marginal revenue when he sells three wands?

During the early twentieth century,Alcoa bought up several bauxite (a source of aluminum ore)mines in the Caribbean.This is an example of ________.

Natural barriers to entry ________.

Compared to a perfectly competitive industry,________ in a monopoly.

To maximize profits,the monopolist should charge a price of ________ per unit.

The following figure shows the marginal revenue (MR) and average total cost (ATC) and marginal cost (MC) curves of a monopolist. -Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus under the competitive market would have been ________.

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.The consumer surplus in this market is ________,while the consumer surplus in the competitive circumstance would have been ________.

Scenario: Mr. Olivander has a monopoly on supplying magic wands. The table below shows the demand schedule for magic wands per day. -Refer to the scenario above.What is Mr.Olivander's total revenue when he charges a price of $65 for his wands?

If the marginal cost of a monopolist exceeds its marginal revenue,________.

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.The output produced in this market is ________ units,while the output produced under a comparable perfectly competitive market is ________ units.

In practice,price discrimination is never perfect.Why?

The following figure is a supply-demand diagram that characterizes the demand, marginal revenue, and cost curves for a profit-maximizing monopolist. -Refer to the figure above.Under monopoly,deadweight loss is ________.

Which of the following is an example of a good produced under monopoly?

The following figure shows the costs and revenue curves of a firm in a monopoly market. -Refer to the figure above.If the government decides to regulate this market at the socially optimal price level,the profit of this monopolist will equal ________.

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.Compared to a competitive market,how much is the deadweight loss of this monopoly?

At a certain level of production,the average total cost faced by a monopolist is $6 and the marginal cost faced by the monopolist is $4.If the government decides to regulate the market by setting the price at the efficient price,the good will be sold at a price of ________.

The Principles and Practice of Economics

Economic Methods and Economic Questions

Optimization: Doing the Best You Can

Demand, supply, and Equilibrium

Consumers and Incentives

Sellers and Incentives

Perfect Competition and the Invisible Hand

Trade

Externalities and Public Goods

The Government in the Economy: Taxation and Regulation

Markets for Factors of Production

Game Theory and Strategic Play

Oligopoly and Monopolistic Competition

Trade-Offs Involving Time and Risk

The Economics of Information

Auctions and Bargaining

Social Economics

Filters

The following figure shows the marginal revenue (MR) and average total cost (ATC) and marginal cost (MC) curves of a monopolist. -Refer to the figure above.The consumer surplus in this market is ,while the consumer surplus under the competitive market would have been .

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.The consumer surplus in this market is ,while the consumer surplus in the competitive circumstance would have been .

The following figure shows the revenue and cost curves of a monopolist. -Refer to the figure above.The output produced in this market is units,while the output produced under a comparable perfectly competitive market is units.