Question 1

Government regulation of monopolies is designed to

Accepted Answer

A) prevent price discrimination 
B) eliminate rent-seeking activities 
C) reduce barriers to entry into monopolized markets 
D) keep prices and profits lower than they would otherwise be 
E) ensure that monopolies are minimizing costs 
A) prevent price discrimination 
B) eliminate rent-seeking activities 
C) reduce barriers to entry into monopolized markets 
D) keep prices and profits lower than they would otherwise be 
E) ensure that monopolies are minimizing costs

Question 2

The monopoly that does not practice price discrimination

Accepted Answer

A) is a firm with a marginal revenue curve with a slope of zero 
B) is a price taker 
C) charges the same price for every unit of output it sells 
D) operates in a market where all firms charge the same price 
E) is always profitable in the short run 
A) is a firm with a marginal revenue curve with a slope of zero 
B) is a price taker 
C) charges the same price for every unit of output it sells 
D) operates in a market where all firms charge the same price 
E) is always profitable in the short run

Question 3

When a firm engages in perfect price discrimination,

Accepted Answer

A) marginal revenue is equal to price 
B) marginal revenue is below price 
C) marginal revenue is below marginal cost 
D) profits are reduced relative to a single-price monopolist 
E) rent-seeking behavior must occur 
A) marginal revenue is equal to price 
B) marginal revenue is below price 
C) marginal revenue is below marginal cost 
D) profits are reduced relative to a single-price monopolist 
E) rent-seeking behavior must occur

Question 4

Which of the following conditions would prevent price discrimination?

Accepted Answer

A) the ability to identify customers who are willing to pay more 
B) the ability to prevent low-price customers from reselling to high-price customers 
C) perfect competition 
D) a monopoly market structure 
E) profit maximization 
A) the ability to identify customers who are willing to pay more 
B) the ability to prevent low-price customers from reselling to high-price customers 
C) perfect competition 
D) a monopoly market structure 
E) profit maximization

Question 5

Each of the following is a source of monopoly except:

Accepted Answer

A) Patents. 
B) Large economies of scale. 
C) Small fixed costs. 
D) Government franchise. 
A) Patents. 
B) Large economies of scale. 
C) Small fixed costs. 
D) Government franchise.

Question 6

Although there are barriers to entry in a monopolized industry,there are usually many close substitutes for the monopolist's product.

Accepted Answer

A) True 
 B)False

Question 7

Rent seeking lowers profits by

Accepted Answer

A) shifting the market demand curve to the right 
B) shifting the market supply curve to the left 
C) shifting the ATC curve upward 
D) shifting the ATC curve downward 
E) flattening the marginal revenue curve 
A) shifting the market demand curve to the right 
B) shifting the market supply curve to the left 
C) shifting the ATC curve upward 
D) shifting the ATC curve downward 
E) flattening the marginal revenue curve

Question 8

When a monopoly is created through government franchise,

Accepted Answer

A) the firm is assured of above-normal profit 
B) it is subject to government price regulation 
C) the firm will discontinue any rent-seeking activity 
D) price discrimination is forbidden 
E) the government prevents both entry and exit in the long run 
A) the firm is assured of above-normal profit 
B) it is subject to government price regulation 
C) the firm will discontinue any rent-seeking activity 
D) price discrimination is forbidden 
E) the government prevents both entry and exit in the long run

Question 9

Which of the following would prevent a pharmaceutical manufacturer from successfully using price discrimination?

Accepted Answer

A) It's customers all have the same elasticity of demand for its drugs. 
B) The demand schedule for pharmaceuticals is horizontal. 
C) Low-price customers could resell the drugs to high-priced customers. 
D) All of the above. 
A) It's customers all have the same elasticity of demand for its drugs. 
B) The demand schedule for pharmaceuticals is horizontal. 
C) Low-price customers could resell the drugs to high-priced customers. 
D) All of the above.

Question 10

-Figure 10-5 shows the cost and demand curves facing a monopolist whose marginal cost is constant.The firm has no fixed costs.If it does not discriminate what will it's profit be?

Accepted Answer

A) area PP'BA 
B) area OPAQ* 
C) area PP'CA 
D) area APC 
E) area OP"BQ* 
A) area PP'BA 
B) area OPAQ* 
C) area PP'CA 
D) area APC 
E) area OP"BQ*

Question 11

For a monopolist,marginal revenue is lower than price.

Accepted Answer

A) True 
 B)False

Question 12

-For the monopolist in Figure 10-2 producing at point D,which of the following statements is true?

Accepted Answer

A) profit will be greater than producing at point C 
B) profit will be the same as producing at point C 
C) profit will be less than producing at C 
D) profit will be maximized 
E) cannot compare profit level at C and D 
A) profit will be greater than producing at point C 
B) profit will be the same as producing at point C 
C) profit will be less than producing at C 
D) profit will be maximized 
E) cannot compare profit level at C and D

Question 13

The concept of network externalities is most relevant to purchasers of

Accepted Answer

A) computer software. 
B) automobiles. 
C) television sets. 
D) radios. 
A) computer software. 
B) automobiles. 
C) television sets. 
D) radios.

Question 14

-What is the profit-maximizing level of output for the non-discriminating monopolist in Figure 10-3?

Accepted Answer

A) 1 unit 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units 
A) 1 unit 
B) 2 units 
C) 3 units 
D) 4 units 
E) 5 units

Government regulation of monopolies is designed to

The monopoly that does not practice price discrimination

When a firm engages in perfect price discrimination,

Which of the following conditions would prevent price discrimination?

Each of the following is a source of monopoly except:

Although there are barriers to entry in a monopolized industry,there are usually many close substitutes for the monopolist's product.

Rent seeking lowers profits by

When a monopoly is created through government franchise,

Which of the following would prevent a pharmaceutical manufacturer from successfully using price discrimination?

-Figure 10-5 shows the cost and demand curves facing a monopolist whose marginal cost is constant.The firm has no fixed costs.If it does not discriminate what will it's profit be?

For a monopolist,marginal revenue is lower than price.

-For the monopolist in Figure 10-2 producing at point D,which of the following statements is true?

The concept of network externalities is most relevant to purchasers of

-What is the profit-maximizing level of output for the non-discriminating monopolist in Figure 10-3?

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters

Exam 11: Monopoly

Government regulation of monopolies is designed to

The monopoly that does not practice price discrimination

When a firm engages in perfect price discrimination,

Which of the following conditions would prevent price discrimination?

Each of the following is a source of monopoly except:

Although there are barriers to entry in a monopolized industry,there are usually many close substitutes for the monopolist's product.

Rent seeking lowers profits by

When a monopoly is created through government franchise,

Which of the following would prevent a pharmaceutical manufacturer from successfully using price discrimination?

-Figure 10-5 shows the cost and demand curves facing a monopolist whose marginal cost is constant.The firm has no fixed costs.If it does not discriminate what will it's profit be?

For a monopolist,marginal revenue is lower than price.

-For the monopolist in Figure 10-2 producing at point D,which of the following statements is true?

The concept of network externalities is most relevant to purchasers of

-What is the profit-maximizing level of output for the non-discriminating monopolist in Figure 10-3?

What Is Economics

Scarcity, choice, and Economic Systems

Supply and Demand

Working With Supply and Demand

Elasticity

Consumer Choice

Production and Cost

How Firms Make Decisions: Profit Maximization

Perfect Competition

B:Perfect Competition

Monopolistic Competition and Oligopoly

Labor Markets

B: Labor Markets

Capital and Financial Markets

Economic Efficiency and the Competitive Ideal

Governments Role in Economic Efficiency

Comparative Advantage and the Gains From International Trade

Filters