Question 1

If a monopoly wants to sell a larger quantity, it must

Accepted Answer

A) set a higher price. 
B) maintain the current price. 
C) set a lower price. 
D) implement new technology. 
E) increase the barrier to entry that protects it. 
A) set a higher price. 
B) maintain the current price. 
C) set a lower price. 
D) implement new technology. 
E) increase the barrier to entry that protects it.

Question 2

Which of the following industries is most likely closest to achieving perfect price discrimination?

Accepted Answer

A) the airline industry 
B) the wheat industry 
C) the textbook industry 
D) the toilet paper industry 
E) the soft drink industry 
A) the airline industry 
B) the wheat industry 
C) the textbook industry 
D) the toilet paper industry 
E) the soft drink industry

Question 3

The social interest theory of regulation is that

Accepted Answer

A) regulators help producers maximize economic profit. 
B) regulation seeks to increase the government's revenue. 
C) regulation causes producers to produce at a point where they are earning normal profits. 
D) regulation seeks an efficient use of resources. 
E) regulation focuses on the consumers' interests and ignores producers' interests. 
A) regulators help producers maximize economic profit. 
B) regulation seeks to increase the government's revenue. 
C) regulation causes producers to produce at a point where they are earning normal profits. 
D) regulation seeks an efficient use of resources. 
E) regulation focuses on the consumers' interests and ignores producers' interests.

Question 4

A single-price monopoly can sell 10 units of its product at a price of $45 each but to sell 11 units, the monopoly must cut the price to $44.What is the marginal revenue of the extra unit sold?

Accepted Answer

A) $484 
B) $450 
C) $44 
D) $34 
E) -$1 
A) $484 
B) $450 
C) $44 
D) $34 
E) -$1

Question 5

Under which of the following is consumer surplus zero?

Accepted Answer

A) all types of monopoly 
B) only single-price monopoly 
C) only perfectly price-discriminating monopoly 
D) only price discrimination on the basis of the number of units purchased 
E) perfect competition 
A) all types of monopoly 
B) only single-price monopoly 
C) only perfectly price-discriminating monopoly 
D) only price discrimination on the basis of the number of units purchased 
E) perfect competition

Question 6

Which of the following statements about price discrimination is false?

Accepted Answer

A) Price discrimination is a method for a seller to capture some consumer surplus. 
B) Compared to a single-price monopoly, the number of units sold increases when a monopoly price discriminates. 
C) Charging less for a second pizza that is identical to the first is an example of price discrimination. 
D) Price discrimination increases a monopoly's profit. 
E) All forms of price discrimination are illegal. 
A) Price discrimination is a method for a seller to capture some consumer surplus. 
B) Compared to a single-price monopoly, the number of units sold increases when a monopoly price discriminates. 
C) Charging less for a second pizza that is identical to the first is an example of price discrimination. 
D) Price discrimination increases a monopoly's profit. 
E) All forms of price discrimination are illegal.

Question 7

If the technology for producing a good enables one firm to meet the entire market demand at a lower average total cost than two or more firms could, then that firm has

Accepted Answer

A) patented the market. 
B) a natural monopoly. 
C) increasing average total costs. 
D) a legal barrier to entry. 
E) a discriminatory monopoly. 
A) patented the market. 
B) a natural monopoly. 
C) increasing average total costs. 
D) a legal barrier to entry. 
E) a discriminatory monopoly.

Question 8

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

Accepted Answer

A) marginal revenue equals marginal cost. 
B) price equals marginal cost. 
C) it can charge the highest possible price. 
D) marginal revenue exceeds marginal cost by as much as possible. 
E) total revenue equals total cost. 
A) marginal revenue equals marginal cost. 
B) price equals marginal cost. 
C) it can charge the highest possible price. 
D) marginal revenue exceeds marginal cost by as much as possible. 
E) total revenue equals total cost.

Question 9

The capture theory of regulation predicts that regulations bring ________ to producers and impose ________ on any individual consumer.

Accepted Answer

A) small benefits; small costs 
B) small benefits; large costs 
C) large benefits; small costs 
D) large benefits; large costs 
E) large benefits; no costs 
A) small benefits; small costs 
B) small benefits; large costs 
C) large benefits; small costs 
D) large benefits; large costs 
E) large benefits; no costs

Question 10

Assume someone organizes all farms in the nation into a monopoly.What is the monopoly's marginal cost curve?

Accepted Answer

A) It is a horizontal line at the competitive industry's price. 
B) It is a vertical line at the formerly competitive industry's quantity. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is the formerly competitive industry's supply curve. 
E) It is the same as the formally competitive industry's average total cost curve. 
A) It is a horizontal line at the competitive industry's price. 
B) It is a vertical line at the formerly competitive industry's quantity. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is the formerly competitive industry's supply curve. 
E) It is the same as the formally competitive industry's average total cost curve.

Question 11

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above.What is Christy's marginal revenue from the 25th haircut?

Accepted Answer

A) zero 
B) $5.00 
C) $17.50 
D) $50.00 
A) zero 
B) $5.00 
C) $17.50 
D) $50.00

Question 12

Which of the following is always true for a single-price monopolist?

Accepted Answer

A) P > MR B) P < MR C) P = MR D) P = elasticity of demand E) None of the above answers is correct because none of them is always true. A) P > MR B) P < MR C) P = MR D) P = elasticity of demand E) None of the above answers is correct because none of them is always true.

Question 13

A natural monopoly is one that arises from

Accepted Answer

A) patent law. 
B) copyright law. 
C) a firm buying all of a natural resource. 
D) economies of scale. 
E) ownership of a natural resource. 
A) patent law. 
B) copyright law. 
C) a firm buying all of a natural resource. 
D) economies of scale. 
E) ownership of a natural resource.

Question 14

-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 15

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit, Paul produces ________ pillows per hour and if the market was perfectly competitive, ________ pillows per hour would be produced.

Accepted Answer

A) 0; 4,000 
B) 3,000; 4,000 
C) 4,000; 4,000 
D) 3,000; 3,000 
E) 0; 3,000 
A) 0; 4,000 
B) 3,000; 4,000 
C) 4,000; 4,000 
D) 3,000; 3,000 
E) 0; 3,000

Question 16

In a monopoly, producers ________ and consumers ________.

Accepted Answer

A) gain; lose 
B) lose; lose 
C) lose; gain 
D) gain; gain 
E) gain; do not gain or lose 
A) gain; lose 
B) lose; lose 
C) lose; gain 
D) gain; gain 
E) gain; do not gain or lose

Question 17

Why do some firms price discriminate? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

Accepted Answer

Price discrimination helps businesses ca

Question 18

How can managers of natural monopolies exaggerate their costs?

Accepted Answer

By increasing on-the-job luxury items su

Question 19

How does marginal revenue compare to price for a single-price monopoly?

Accepted Answer

Marginal r

Question 20

-The above table gives the demand schedule for a single-price monopoly.If the marginal cost is $3, the profit maximizing output for the monopoly will be between

Accepted Answer

A) 1 to 2 units. 
B) 2 to 3 units. 
C) 3 to 4 units. 
D) 4 to 5 units. 
E) Exactly 5 units. 
A) 1 to 2 units. 
B) 2 to 3 units. 
C) 3 to 4 units. 
D) 4 to 5 units. 
E) Exactly 5 units.

If a monopoly wants to sell a larger quantity, it must

Which of the following industries is most likely closest to achieving perfect price discrimination?

The social interest theory of regulation is that

A single-price monopoly can sell 10 units of its product at a price of $45 each but to sell 11 units, the monopoly must cut the price to $44.What is the marginal revenue of the extra unit sold?

Under which of the following is consumer surplus zero?

Which of the following statements about price discrimination is false?

If the technology for producing a good enables one firm to meet the entire market demand at a lower average total cost than two or more firms could, then that firm has

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

The capture theory of regulation predicts that regulations bring to producers and impose on any individual consumer.

Assume someone organizes all farms in the nation into a monopoly.What is the monopoly's marginal cost curve?

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above.What is Christy's marginal revenue from the 25th haircut?

Which of the following is always true for a single-price monopolist?

A natural monopoly is one that arises from

-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

In a monopoly, producers and consumers .

Why do some firms price discriminate? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

How can managers of natural monopolies exaggerate their costs?

How does marginal revenue compare to price for a single-price monopoly?

-The above table gives the demand schedule for a single-price monopoly.If the marginal cost is $3, the profit maximizing output for the monopoly will be between

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

If a monopoly wants to sell a larger quantity, it must

Which of the following industries is most likely closest to achieving perfect price discrimination?

The social interest theory of regulation is that

A single-price monopoly can sell 10 units of its product at a price of $45 each but to sell 11 units, the monopoly must cut the price to $44.What is the marginal revenue of the extra unit sold?

Under which of the following is consumer surplus zero?

Which of the following statements about price discrimination is false?

If the technology for producing a good enables one firm to meet the entire market demand at a lower average total cost than two or more firms could, then that firm has

The maximum profit for a single-price monopoly is found when the firm produces the level of output so that

The capture theory of regulation predicts that regulations bring ________ to producers and impose ________ on any individual consumer.

Assume someone organizes all farms in the nation into a monopoly.What is the monopoly's marginal cost curve?

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above.What is Christy's marginal revenue from the 25th haircut?

Which of the following is always true for a single-price monopolist?

A natural monopoly is one that arises from

-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

In a monopoly, producers ________ and consumers ________.

Why do some firms price discriminate? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

How can managers of natural monopolies exaggerate their costs?

How does marginal revenue compare to price for a single-price monopoly?

-The above table gives the demand schedule for a single-price monopoly.If the marginal cost is $3, the profit maximizing output for the monopoly will be between

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

The capture theory of regulation predicts that regulations bring to producers and impose on any individual consumer.

In a monopoly, producers and consumers .