Question 1

Price discrimination can benefit some consumers when

Accepted Answer

A) the additional profit realized by the monopolist equals the cost incurred 
B) the government comes in to regulate the market 
C) competitors are also able to price discriminate 
D) those consumers pay a price lower than the price they would have to pay a single-price monopolist 
E) those consumers pay a price higher than the price they would have to pay a single-price monopolist 
A) the additional profit realized by the monopolist equals the cost incurred 
B) the government comes in to regulate the market 
C) competitors are also able to price discriminate 
D) those consumers pay a price lower than the price they would have to pay a single-price monopolist 
E) those consumers pay a price higher than the price they would have to pay a single-price monopolist

Question 2

Price discrimination always benefits

Accepted Answer

A) the owners of the price-discriminating firm 
B) the government 
C) society as a whole 
D) consumers 
E) competitors 
A) the owners of the price-discriminating firm 
B) the government 
C) society as a whole 
D) consumers 
E) competitors

Question 3

Which of the following is not a requirement for price discrimination?

Accepted Answer

A) The firm must be able to identify consumers who are willing to pay more for the product. 
B) The firm must be able to prevent resale of the product. 
C) There must be a downward-sloping demand curve for the product. 
D) The firm must face different costs for the goods sold to different consumers. 
A) The firm must be able to identify consumers who are willing to pay more for the product. 
B) The firm must be able to prevent resale of the product. 
C) There must be a downward-sloping demand curve for the product. 
D) The firm must face different costs for the goods sold to different consumers.

Question 4

The time and money spent by a monopoly firm on lobbying for favorable government policies is called

Accepted Answer

A) the capitalized value of the firm 
B) limit pricing 
C) rent-seeking activity 
D) administered pricing 
E) implicit cost 
A) the capitalized value of the firm 
B) limit pricing 
C) rent-seeking activity 
D) administered pricing 
E) implicit cost

Question 5

A monopolist earns a profit whenever

Accepted Answer

A) total revenue equals total cost 
B) marginal revenue equals marginal cost 
C) price exceeds average variable cost 
D) marginal revenue is positive 
E) price exceeds average total cost 
A) total revenue equals total cost 
B) marginal revenue equals marginal cost 
C) price exceeds average variable cost 
D) marginal revenue is positive 
E) price exceeds average total cost

Question 6

Which of the following conditions would prevent price discrimination?

Accepted Answer

A) an economic profit 
B) a monopoly market structure 
C) profit maximization 
D) the inability to identify those customers willing to pay more 
E) the ability to prevent low-price customers from reselling to high-price customers 
A) an economic profit 
B) a monopoly market structure 
C) profit maximization 
D) the inability to identify those customers willing to pay more 
E) the ability to prevent low-price customers from reselling to high-price customers

Question 7

Patents and copyrights are designed to

Accepted Answer

A) eliminate above-normal profit in the short run 
B) move monopoly prices closer to prices that would occur under perfect competition 
C) prevent the capitalization of monopoly profit 
D) allow a period of above-normal profit to encourage innovation 
E) limit a monopoly's rent-seeking activities 
A) eliminate above-normal profit in the short run 
B) move monopoly prices closer to prices that would occur under perfect competition 
C) prevent the capitalization of monopoly profit 
D) allow a period of above-normal profit to encourage innovation 
E) limit a monopoly's rent-seeking activities

Question 8

-Assuming no price discrimination,the firm depicted in Figure 10-16 will

Accepted Answer

A) both d and e 
B) break even in the short run 
C) earn an economic profit in the short run 
D) suffer an economic loss if it produces 
E) shut down to minimize short-run losses 
A) both d and e 
B) break even in the short run 
C) earn an economic profit in the short run 
D) suffer an economic loss if it produces 
E) shut down to minimize short-run losses

Question 9

Which of the following statements about a non-discriminating monopoly firm is correct?

Accepted Answer

A) It charges a price greater than its marginal cost. 
B) Its high prices generate inflation. 
C) It charges a price that maximizes its total revenues. 
D) As a price setter,it can ignore market demand. 
E) It has no incentive to produce each output level at the lowest possible cost. 
A) It charges a price greater than its marginal cost. 
B) Its high prices generate inflation. 
C) It charges a price that maximizes its total revenues. 
D) As a price setter,it can ignore market demand. 
E) It has no incentive to produce each output level at the lowest possible cost.

Question 10

Unlike firms operating in more competitive markets,monopolies never shut down in the short run.

Accepted Answer

A) True 
 B)False

Question 11

Which of the output levels shown in Figure 10-10 would a monopolist never produce?

Accepted Answer

A) 1 unit 
B) 4 units 
C) 7 units 
D) 3 units 
E) 5 units 
A) 1 unit 
B) 4 units 
C) 7 units 
D) 3 units 
E) 5 units

Question 12

When car dealerships post high prices for their cars and then negotiate deals based on their estimate of how much each person will pay,

Accepted Answer

A) the dealership will lose revenue 
B) marginal revenue and marginal cost are being used to set prices and output 
C) few dealerships will be able to survive 
D) rent-seeking behavior will lead new dealerships to enter the market 
E) this is a form of price discrimination 
A) the dealership will lose revenue 
B) marginal revenue and marginal cost are being used to set prices and output 
C) few dealerships will be able to survive 
D) rent-seeking behavior will lead new dealerships to enter the market 
E) this is a form of price discrimination

Question 13

To maximize profit,a monopolist should produce the level of output at which

Accepted Answer

A) price equals marginal cost 
B) price equals marginal revenue and marginal cost 
C) price equals marginal revenue 
D) marginal revenue equals marginal cost 
E) price equals average total cost 
A) price equals marginal cost 
B) price equals marginal revenue and marginal cost 
C) price equals marginal revenue 
D) marginal revenue equals marginal cost 
E) price equals average total cost

Question 14

A firm's ability to successfully practice price discrimination is greater

Accepted Answer

A) the more difficult it is to identify a customer's willingness to pay 
B) the more standardized the product offered by the firm 
C) the more difficult it is to transfer its product from person to person 
D) the more active the resale market is for their product 
E) in goods-producing markets than in service-producing markets 
A) the more difficult it is to identify a customer's willingness to pay 
B) the more standardized the product offered by the firm 
C) the more difficult it is to transfer its product from person to person 
D) the more active the resale market is for their product 
E) in goods-producing markets than in service-producing markets

Question 15

Economies of scale act as a barrier to entry because

Accepted Answer

A) one large firm can supply the market at a higher average cost than many small firms could 
B) firms are not allowed by law to sell output below average cost 
C) large firms can hire inputs at a higher price than smaller firms could 
D) firms will not compete with a larger firm when there are differences in marginal cost 
E) one large firm can produce the market output at a lower average cost than many small firms 
A) one large firm can supply the market at a higher average cost than many small firms could 
B) firms are not allowed by law to sell output below average cost 
C) large firms can hire inputs at a higher price than smaller firms could 
D) firms will not compete with a larger firm when there are differences in marginal cost 
E) one large firm can produce the market output at a lower average cost than many small firms

Question 16

Marginal revenue is

Accepted Answer

A) the change in total revenue obtained by selling an additional unit of output 
B) average revenue per unit of output 
C) the change in total revenue per unit of cost 
D) total revenue divided by average revenue 
E) average revenue divided by marginal cost 
A) the change in total revenue obtained by selling an additional unit of output 
B) average revenue per unit of output 
C) the change in total revenue per unit of cost 
D) total revenue divided by average revenue 
E) average revenue divided by marginal cost

Question 17

Network externalities

Accepted Answer

A) explain why switching costs fall as the size of a network increases 
B) are the service-industry equivalent of natural monopolies in goods-producing industries 
C) are more important in the short run than in the long run 
D) help explain why monopolies often do not last for very long 
E) can explain the dominance of existing firms in some industries 
A) explain why switching costs fall as the size of a network increases 
B) are the service-industry equivalent of natural monopolies in goods-producing industries 
C) are more important in the short run than in the long run 
D) help explain why monopolies often do not last for very long 
E) can explain the dominance of existing firms in some industries

Question 18

-Assuming no price discrimination,the firm represented by Figure 10-16 will have a per unit profit of

Accepted Answer

A) $50 
B) $100 
C) $150 
D) $200 
E) $250 
A) $50 
B) $100 
C) $150 
D) $200 
E) $250

Question 19

Compared to perfectly competitive markets,monopoly produces

Accepted Answer

A) higher output and lower price. 
B) lower output and higher price. 
C) lower output and lower price. 
D) higher output and higher price. 
A) higher output and lower price. 
B) lower output and higher price. 
C) lower output and lower price. 
D) higher output and higher price.

Question 20

A monopoly exists because of

Accepted Answer

A) barriers to entry 
B) the large number of buyers and sellers 
C) the absence of barriers to entry 
D) collusion among the dominant firms 
E) the absence of exclusive government franchises 
A) barriers to entry 
B) the large number of buyers and sellers 
C) the absence of barriers to entry 
D) collusion among the dominant firms 
E) the absence of exclusive government franchises

Price discrimination can benefit some consumers when

Price discrimination always benefits

Which of the following is not a requirement for price discrimination?

The time and money spent by a monopoly firm on lobbying for favorable government policies is called

A monopolist earns a profit whenever

Which of the following conditions would prevent price discrimination?

Patents and copyrights are designed to

-Assuming no price discrimination,the firm depicted in Figure 10-16 will

Which of the following statements about a non-discriminating monopoly firm is correct?

Unlike firms operating in more competitive markets,monopolies never shut down in the short run.

Which of the output levels shown in Figure 10-10 would a monopolist never produce?

When car dealerships post high prices for their cars and then negotiate deals based on their estimate of how much each person will pay,

To maximize profit,a monopolist should produce the level of output at which

A firm's ability to successfully practice price discrimination is greater

Economies of scale act as a barrier to entry because

Marginal revenue is

Network externalities

-Assuming no price discrimination,the firm represented by Figure 10-16 will have a per unit profit of

Compared to perfectly competitive markets,monopoly produces

A monopoly exists because of

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

Price discrimination can benefit some consumers when

Price discrimination always benefits

Which of the following is not a requirement for price discrimination?

The time and money spent by a monopoly firm on lobbying for favorable government policies is called

A monopolist earns a profit whenever

Which of the following conditions would prevent price discrimination?

Patents and copyrights are designed to

-Assuming no price discrimination,the firm depicted in Figure 10-16 will

Which of the following statements about a non-discriminating monopoly firm is correct?

Unlike firms operating in more competitive markets,monopolies never shut down in the short run.

Which of the output levels shown in Figure 10-10 would a monopolist never produce?

When car dealerships post high prices for their cars and then negotiate deals based on their estimate of how much each person will pay,

To maximize profit,a monopolist should produce the level of output at which

A firm's ability to successfully practice price discrimination is greater

Economies of scale act as a barrier to entry because

Marginal revenue is

Network externalities

-Assuming no price discrimination,the firm represented by Figure 10-16 will have a per unit profit of

Compared to perfectly competitive markets,monopoly produces

A monopoly exists because of

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