Question 1

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

Accepted Answer

Marginal revenue is less than price.

Question 2

A price-discriminating monopoly is a monopoly that

Accepted Answer

A) sells its output at a single price to all of its customers. 
B) sells different units of a good or service at different prices. 
C) has control over the resources used to produce the product. 
D) has a license to sell the product. 
E) illegally charges different customers different prices for the good it produces. 
A) sells its output at a single price to all of its customers. 
B) sells different units of a good or service at different prices. 
C) has control over the resources used to produce the product. 
D) has a license to sell the product. 
E) illegally charges different customers different prices for the good it produces. B

Question 3

A single-price monopoly transfers

Accepted Answer

A) consumer surplus to producers. 
B) producer surplus to consumers. 
C) economic profit to consumers. 
D) economic profit to the government. 
E) economic profit to deadweight loss. 
A) consumer surplus to producers. 
B) producer surplus to consumers. 
C) economic profit to consumers. 
D) economic profit to the government. 
E) economic profit to deadweight loss. A

Question 4

A single-price monopoly is producing at an output level where marginal revenue is $15, marginal cost is $13, and price is $20. This monopoly is

Accepted Answer

A) not maximizing its profit and should decrease output to increase its profit. 
B) not maximizing its profit and should increase output to increase its profit. 
C) maximizing its profit but should shut down. 
D) maximizing its profit and should not shut down. 
E) maximizing its profit but still should decrease output to earn even more profit. 
A) not maximizing its profit and should decrease output to increase its profit. 
B) not maximizing its profit and should increase output to increase its profit. 
C) maximizing its profit but should shut down. 
D) maximizing its profit and should not shut down. 
E) maximizing its profit but still should decrease output to earn even more profit.

Question 5

A monopoly market has

Accepted Answer

A) a few firms. 
B) a single firm. 
C) two dominating firms in the market. 
D) only two firms in it. 
E) some unspecified number of firms in it. 
A) a few firms. 
B) a single firm. 
C) two dominating firms in the market. 
D) only two firms in it. 
E) some unspecified number of firms in it.

Question 6

Which of the following is a legal barrier to entry?
i. public franchise
ii. government license
iii. patent

Accepted Answer

A) iii only 
B) i and iii 
C) ii and iii 
D) i, ii, and iii 
E) i and ii 
A) iii only 
B) i and iii 
C) ii and iii 
D) i, ii, and iii 
E) i and ii

Question 7

A monopoly is a market with

Accepted Answer

A) many suppliers each producing an identical product. 
B) no barriers to entry. 
C) many substitutes. 
D) one supplier. 
E) many suppliers each producing a slightly different product. 
A) many suppliers each producing an identical product. 
B) no barriers to entry. 
C) many substitutes. 
D) one supplier. 
E) many suppliers each producing a slightly different product.

Question 8

If a natural monopoly is told to set price equal to average cost, then the firm

Accepted Answer

A) is not able to set marginal revenue equal to marginal cost. 
B) automatically also sets price equal to marginal cost. 
C) will make a substantial economic profit. 
D) will incur an economic loss. 
E) sets a price that is lower than its marginal cost. 
A) is not able to set marginal revenue equal to marginal cost. 
B) automatically also sets price equal to marginal cost. 
C) will make a substantial economic profit. 
D) will incur an economic loss. 
E) sets a price that is lower than its marginal cost.

Question 9

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 10

The table below gives a monopoly's demand schedule. Complete the table by calculating the total revenue and the marginal revenue.
 $$\begin{array} { c c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity } \
\text { (units) }
\end{array} & \begin{array} { c } 
\text { Total revenue } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Marginal revenue } \
\text { (dollars) }
\end{array} \
\hline 6 & 1 & - & - \
5 & 2 & - & - \
4 & 3 & - & - \
3 & 4 & - & - \
2 & 5 & - & - \
1 & 6 & - & - \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { c c c c } 
\begin{arra

Question 11

"Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect?
 Explain your answer.

Accepted Answer

The statement is correct. A si

Question 12

To maximize its profit, a single-price monopoly produces the amount of output so that its marginal revenue

Accepted Answer

A) equals zero. 
B) equals its marginal cost. 
C) exceeds its marginal cost but not necessarily by as much as possible. 
D) is less than its marginal cost. 
E) exceeds its marginal cost by as much as possible. 
A) equals zero. 
B) equals its marginal cost. 
C) exceeds its marginal cost but not necessarily by as much as possible. 
D) is less than its marginal cost. 
E) exceeds its marginal cost by as much as possible.

Question 13

An example of a monopoly would be

Accepted Answer

A) one of many U.S. wheat farmers. 
B) one of the few U.S. auto makers. 
C) AT&T cell phone service. 
D) the local water company. 
E) Taco Bell. 
A) one of many U.S. wheat farmers. 
B) one of the few U.S. auto makers. 
C) AT&T cell phone service. 
D) the local water company. 
E) Taco Bell.

Question 14

Which of the following would create a natural monopoly?

Accepted Answer

A) ownership of all the available units of a necessary input 
B) an exclusive right granted to supply a good or service 
C) requirement of a government license before the firm can sell the good or service 
D) technology enabling a single firm to produce at a lower average total cost than two or more firms 
E) a patent granted the producer of the good or service 
A) ownership of all the available units of a necessary input 
B) an exclusive right granted to supply a good or service 
C) requirement of a government license before the firm can sell the good or service 
D) technology enabling a single firm to produce at a lower average total cost than two or more firms 
E) a patent granted the producer of the good or service

Question 15

If a regulatory agency sets the price equal to marginal cost for a natural monopoly, the

Accepted Answer

A) government might have to provide a subsidy to the firm to keep it in business. 
B) price is the same as the unregulated monopoly price. 
C) firm makes an economic profit, though not the maximum economic profit. 
D) firm makes the maximum economic profit. 
E) firm makes zero economic profit. 
A) government might have to provide a subsidy to the firm to keep it in business. 
B) price is the same as the unregulated monopoly price. 
C) firm makes an economic profit, though not the maximum economic profit. 
D) firm makes the maximum economic profit. 
E) firm makes zero economic profit.

Question 16

-In the above figure, the profit-maximizing output for this single-price monopoly is ________ units and the price is ________.

Accepted Answer

A) 200; $10 
B) 300; $20 
C) 500; $50 
D) 200; $30 
E) 300; $30 
A) 200; $10 
B) 300; $20 
C) 500; $50 
D) 200; $30 
E) 300; $30

Question 17

Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?

Accepted Answer

A) medical doctor 
B) taxi cab driver 
C) the local pizza parlor 
D) the local telephone company 
E) the local Honda dealership 
A) medical doctor 
B) taxi cab driver 
C) the local pizza parlor 
D) the local telephone company 
E) the local Honda dealership

Question 18

A single-price monopoly

Accepted Answer

A) sets a single, different price for each consumer. 
B) sets a single price for all consumers. 
C) asks each consumer what single price they would be willing to pay. 
D) sets a single, different price for each of two different groups. 
E) sells each unit of its output for the single, highest price that the buyer of that unit is willing to pay. 
A) sets a single, different price for each consumer. 
B) sets a single price for all consumers. 
C) asks each consumer what single price they would be willing to pay. 
D) sets a single, different price for each of two different groups. 
E) sells each unit of its output for the single, highest price that the buyer of that unit is willing to pay.

Question 19

When a firm is able to engage in perfect price discrimination, its marginal revenue curve

Accepted Answer

A) lies below its demand curve. 
B) is the same as its demand curve. 
C) lies above its demand curve. 
D) is the same as its supply curve. 
E) is undefined because it does not exist. 
A) lies below its demand curve. 
B) is the same as its demand curve. 
C) lies above its demand curve. 
D) is the same as its supply curve. 
E) is undefined because it does not exist.

Question 20

One way a company can cover its costs and, at the same time, obey a marginal cost pricing rule is by

Accepted Answer

A) choosing output levels according to the profit-maximizing rule. 
B) using price discrimination. 
C) increasing production. 
D) decreasing production. 
E) decreasing its marginal cost but not changing its average total cost. 
A) choosing output levels according to the profit-maximizing rule. 
B) using price discrimination. 
C) increasing production. 
D) decreasing production. 
E) decreasing its marginal cost but not changing its average total cost.

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

A price-discriminating monopoly is a monopoly that

A single-price monopoly transfers

A single-price monopoly is producing at an output level where marginal revenue is $15, marginal cost is $13, and price is $20. This monopoly is

A monopoly market has

Which of the following is a legal barrier to entry? i. public franchise ii. government license iii. patent

A monopoly is a market with

If a natural monopoly is told to set price equal to average cost, then the firm

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

The table below gives a monopoly's demand schedule. Complete the table by calculating the total revenue and the marginal revenue. Price (dollars) Quantity (units) Total revenue (dollars) Marginal revenue (dollars) 6 1 - - 5 2 - - 4 3 - - 3 4 - - 2 5 - - 1 6 - -

"Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

To maximize its profit, a single-price monopoly produces the amount of output so that its marginal revenue

An example of a monopoly would be

Which of the following would create a natural monopoly?

If a regulatory agency sets the price equal to marginal cost for a natural monopoly, the

-In the above figure, the profit-maximizing output for this single-price monopoly is units and the price is .

Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?

A single-price monopoly

When a firm is able to engage in perfect price discrimination, its marginal revenue curve

One way a company can cover its costs and, at the same time, obey a marginal cost pricing rule is by

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 12: Monopoly

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

A price-discriminating monopoly is a monopoly that

A single-price monopoly transfers

A single-price monopoly is producing at an output level where marginal revenue is $15, marginal cost is $13, and price is $20. This monopoly is

A monopoly market has

Which of the following is a legal barrier to entry? i. public franchise ii. government license iii. patent

A monopoly is a market with

If a natural monopoly is told to set price equal to average cost, then the firm

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

The table below gives a monopoly's demand schedule. Complete the table by calculating the total revenue and the marginal revenue. Price (dollars) Quantity (units) Total revenue (dollars) Marginal revenue (dollars) 6 1 - - 5 2 - - 4 3 - - 3 4 - - 2 5 - - 1 6 - -

"Compared to a competitive market, a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

To maximize its profit, a single-price monopoly produces the amount of output so that its marginal revenue

An example of a monopoly would be

Which of the following would create a natural monopoly?

If a regulatory agency sets the price equal to marginal cost for a natural monopoly, the

-In the above figure, the profit-maximizing output for this single-price monopoly is ________ units and the price is ________.

Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?

A single-price monopoly

When a firm is able to engage in perfect price discrimination, its marginal revenue curve

One way a company can cover its costs and, at the same time, obey a marginal cost pricing rule is by

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

-In the above figure, the profit-maximizing output for this single-price monopoly is units and the price is .