Question 1

Which of the following must exist for a firm to engage in price discrimination?

Accepted Answer

A)  The firm must be able to identify and separate its buyers into different classes, and the low-price buyers cannot resell the product to the high-price buyers. 
B)  The firm must face an inelastic demand. 
C)  The firm must be able to realize economies of scale. 
D)  The firm must have no more than one class of buyer. 
E)  The firm must be a natural monopoly. 
A)  The firm must be able to identify and separate its buyers into different classes, and the low-price buyers cannot resell the product to the high-price buyers. 
B)  The firm must face an inelastic demand. 
C)  The firm must be able to realize economies of scale. 
D)  The firm must have no more than one class of buyer. 
E)  The firm must be a natural monopoly.

Question 2

A single-price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38.What is the firm's total revenue?

Accepted Answer

A)  $38 
B)  $285 
C)  $570 
D)  $19 
E)  There is not enough information given to answer the question. 
A)  $38 
B)  $285 
C)  $570 
D)  $19 
E)  There is not enough information given to answer the question.

Question 3

Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

Accepted Answer

A)  Hard cover books are long lasting and paperbacks can rip easily. 
B)  Readers who want to read the book as soon as it comes out will be willing to pay a higher price compared to those who can wait for the paperback edition. 
C)  A hardcover is the publishers' way of rewarding the avid readers. 
D)  Publishers are not sure of the demand. 
E)  Publishers cannot price discriminate. 
A)  Hard cover books are long lasting and paperbacks can rip easily. 
B)  Readers who want to read the book as soon as it comes out will be willing to pay a higher price compared to those who can wait for the paperback edition. 
C)  A hardcover is the publishers' way of rewarding the avid readers. 
D)  Publishers are not sure of the demand. 
E)  Publishers cannot price discriminate.

Question 4

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is perfectly competitive,the quantity of steak is ________ pounds and when the market is a monopoly the quantity of steak is ________ pounds.

Accepted Answer

A)  2,000; 4,000 
B)  3,000; 2,000 
C)  4,000; 4,000 
D)  5,000; 3,000 
E)  4,000; less than 2,000 pounds. 
A)  2,000; 4,000 
B)  3,000; 2,000 
C)  4,000; 4,000 
D)  5,000; 3,000 
E)  4,000; less than 2,000 pounds.

Question 5

________ natural monopolies is a commonly used,potential solution to the problems presented by natural monopolies.

Accepted Answer

A)  Breaking up firms that are 
B)  Regulating 
C)  Outlawing price discrimination by 
D)  Refusing to grant patents to 
E)  Giving incentives to firms to become 
A)  Breaking up firms that are 
B)  Regulating 
C)  Outlawing price discrimination by 
D)  Refusing to grant patents to 
E)  Giving incentives to firms to become

Question 6

What is the relationship between the marginal revenue curve and the demand curve for a single-price monopoly?

Accepted Answer

For a single-price monopoly,pr

Question 7

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is a monopoly,the price of a pound of steak is

Accepted Answer

A)  $4. 
B)  $8. 
C)  $12. 
D)  $20. 
E)  $2. 
A)  $4. 
B)  $8. 
C)  $12. 
D)  $20. 
E)  $2.

Question 8

One of the tendencies that is common among firms regulated using rate of return regulation is to

Accepted Answer

A)  increase production to an inefficient level. 
B)  inflate the costs of production. 
C)  incur an economic loss. 
D)  understate the costs of production. 
E)  overstate their total revenue. 
A)  increase production to an inefficient level. 
B)  inflate the costs of production. 
C)  incur an economic loss. 
D)  understate the costs of production. 
E)  overstate their total revenue.

Question 9

A monopoly

Accepted Answer

A)  is not protected by barriers to entry. 
B)  produces a good with no close substitutes. 
C)  faces a downward-sloping demand curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  is not protected by barriers to entry. 
B)  produces a good with no close substitutes. 
C)  faces a downward-sloping demand curve. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 10

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC is left unregulated,how many households in Oakland are served?

Accepted Answer

A)  20,000 
B)  30,000 
C)  40,000 
D)  50,000 
E)  10,000 
A)  20,000 
B)  30,000 
C)  40,000 
D)  50,000 
E)  10,000

Question 11

Monopolies ________ fair and ________ efficient.

Accepted Answer

A)  are always; are not 
B)  might be; are always 
C)  might be; might be 
D)  are always; are always 
E)  are never; are always 
A)  are always; are not 
B)  might be; are always 
C)  might be; might be 
D)  are always; are always 
E)  are never; are always

Question 12

When a natural monopoly is regulated using a marginal cost pricing rule,what can you say about the firm's profit and the market's efficiency?

Accepted Answer

Using a marginal cost pricing

Question 13

To be able to price discriminate,a firm must

Accepted Answer

A)  lower prices for all customers. 
B)  raise prices for all customers. 
C)  be able to identify and separate different types of buyers. 
D)  sell a product that can be resold. 
E)  Both answers B and C are correct. 
A)  lower prices for all customers. 
B)  raise prices for all customers. 
C)  be able to identify and separate different types of buyers. 
D)  sell a product that can be resold. 
E)  Both answers B and C are correct.

Question 14

A monopoly creates a deadweight loss because the monopoly

Accepted Answer

A)  sets a price that is too low. 
B)  makes a normal profit. 
C)  does not maximize profit. 
D)  produces less than the efficient quantity. 
E)  produces more than the efficient quantity. 
A)  sets a price that is too low. 
B)  makes a normal profit. 
C)  does not maximize profit. 
D)  produces less than the efficient quantity. 
E)  produces more than the efficient quantity.

Question 15

Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

Accepted Answer

The single-price monopoly crea

Question 16

The figure above shows a natural monopoly.
-In the figure above,if the firm is regulated using a marginal cost pricing rule,the consumer surplus created is equal to the area of

Accepted Answer

A)  ABG. 
B)  ACF. 
C)  BCFG. 
D)  BCE. 
E)  None of the above because there is no consumer surplus created. 
A)  ABG. 
B)  ACF. 
C)  BCFG. 
D)  BCE. 
E)  None of the above because there is no consumer surplus created.

Question 17

The theory that regulation helps producers to maximize profit is the

Accepted Answer

A)  social interest theory. 
B)  consumer surplus theory. 
C)  antitrust theory. 
D)  capture theory. 
E)  oligopoly theory of regulatory bodies. 
A)  social interest theory. 
B)  consumer surplus theory. 
C)  antitrust theory. 
D)  capture theory. 
E)  oligopoly theory of regulatory bodies.

Question 18

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 19

-The table above gives the demand for a monopolist's output.What is the marginal revenue when output is increased from 5 to 6 units?

Accepted Answer

A)  $18 
B)  $4 
C)  $3 
D)  -$2 
A)  $18 
B)  $4 
C)  $3 
D)  -$2

Question 20

If a natural monopoly is regulated using

Accepted Answer

A)  a marginal cost pricing rule, the firm maximizes its profit. 
B)  an average cost pricing rule, the firm incurs an economic loss. 
C)  a total cost pricing rule, the firm will exit the industry. 
D)  a marginal cost pricing rule, the firm incurs an economic loss. 
E)  an average cost pricing rule, the firm maximizes its profit. 
A)  a marginal cost pricing rule, the firm maximizes its profit. 
B)  an average cost pricing rule, the firm incurs an economic loss. 
C)  a total cost pricing rule, the firm will exit the industry. 
D)  a marginal cost pricing rule, the firm incurs an economic loss. 
E)  an average cost pricing rule, the firm maximizes its profit.

Which of the following must exist for a firm to engage in price discrimination?

A single-price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38.What is the firm's total revenue?

Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

________ natural monopolies is a commonly used,potential solution to the problems presented by natural monopolies.

What is the relationship between the marginal revenue curve and the demand curve for a single-price monopoly?

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is a monopoly,the price of a pound of steak is

One of the tendencies that is common among firms regulated using rate of return regulation is to

A monopoly

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC is left unregulated,how many households in Oakland are served?

Monopolies fair and efficient.

When a natural monopoly is regulated using a marginal cost pricing rule,what can you say about the firm's profit and the market's efficiency?

To be able to price discriminate,a firm must

A monopoly creates a deadweight loss because the monopoly

Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using a marginal cost pricing rule,the consumer surplus created is equal to the area of

The theory that regulation helps producers to maximize profit is the

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

-The table above gives the demand for a monopolist's output.What is the marginal revenue when output is increased from 5 to 6 units?

If a natural monopoly is regulated using

Getting Started

The Usand 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 must exist for a firm to engage in price discrimination?

A single-price monopoly has marginal revenue and marginal cost equal to $19 at 15 units of output where the price on the demand curve is $38.What is the firm's total revenue?

Why do publishers print the first edition of a book by a popular author in hard cover and not in paperback?

________ natural monopolies is a commonly used,potential solution to the problems presented by natural monopolies.

What is the relationship between the marginal revenue curve and the demand curve for a single-price monopoly?

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is a monopoly,the price of a pound of steak is

One of the tendencies that is common among firms regulated using rate of return regulation is to

A monopoly

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC is left unregulated,how many households in Oakland are served?

Monopolies ________ fair and ________ efficient.

When a natural monopoly is regulated using a marginal cost pricing rule,what can you say about the firm's profit and the market's efficiency?

To be able to price discriminate,a firm must

A monopoly creates a deadweight loss because the monopoly

Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using a marginal cost pricing rule,the consumer surplus created is equal to the area of

The theory that regulation helps producers to maximize profit is the

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

-The table above gives the demand for a monopolist's output.What is the marginal revenue when output is increased from 5 to 6 units?

If a natural monopoly is regulated using

Getting Started

The Usand 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

Monopolies fair and efficient.