Question 1

For a single-price monopoly, price is

Accepted Answer

A) greater than marginal revenue. 
B) one half of marginal revenue. 
C) equal to marginal revenue. 
D) unrelated to marginal revenue. 
E) always less than average total cost when the firm maximizes its profit. 
A) greater than marginal revenue. 
B) one half of marginal revenue. 
C) equal to marginal revenue. 
D) unrelated to marginal revenue. 
E) always less than average total cost when the firm maximizes its profit.

Question 2

A profit-maximizing output for a single-price monopoly is determined by the intersection of the ________ curves and the profit-maximizing price is found on the ________ curve.

Accepted Answer

A) marginal cost and marginal revenue; marginal revenue 
B) marginal cost and marginal revenue; demand 
C) total revenue and total cost, total revenue 
D) marginal cost and average total cost; demand 
E) demand and supply; supply 
A) marginal cost and marginal revenue; marginal revenue 
B) marginal cost and marginal revenue; demand 
C) total revenue and total cost, total revenue 
D) marginal cost and average total cost; demand 
E) demand and supply; supply

Question 3

A monopolist can make an economic profit in the long run because of

Accepted Answer

A) the relatively elastic demand for its product. 
B) the relatively inelastic demand for its product. 
C) the firm's price setting behavior. 
D) barriers to entry. 
E) the fact that the firm produces where MR = MC. 
A) the relatively elastic demand for its product. 
B) the relatively inelastic demand for its product. 
C) the firm's price setting behavior. 
D) barriers to entry. 
E) the fact that the firm produces where MR = MC.

Question 4

A single-price monopoly has a marginal revenue curve that is

Accepted Answer

A) horizontal and equal to price. 
B) downward sloping and lies below the demand curve. 
C) upward sloping and is the same as its supply curve. 
D) downward sloping and lies above the demand curve. 
E) vertical at the profit-maximizing quantity. 
A) horizontal and equal to price. 
B) downward sloping and lies below the demand curve. 
C) upward sloping and is the same as its supply curve. 
D) downward sloping and lies above the demand curve. 
E) vertical at the profit-maximizing quantity.

Question 5

Which of the following is correct for a single-price monopoly?
I. The firm can determine the quantity it produces and the price it charges.
Ii. It would never profitably produce output in the inelastic range of its demand.
Iii. Its marginal revenue is less than price.

Accepted Answer

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

Question 6

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost. The monopoly can increase its profit by ________.

Accepted Answer

A) shutting down 
B) lowering its price and increasing its output 
C) raising its price and decreasing its output 
D) lowering its price and decreasing its output 
E) not changing its price and increasing its output 
A) shutting down 
B) lowering its price and increasing its output 
C) raising its price and decreasing its output 
D) lowering its price and decreasing its output 
E) not changing its price and increasing its output

Question 7

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 8

Price discrimination is prevented in situations where

Accepted Answer

A) customers can resell the good. 
B) firms have monopolies. 
C) there are legal barriers to entry. 
D) there are no close substitutes for the good or service. 
E) customers have different willingnesses to pay for the good. 
A) customers can resell the good. 
B) firms have monopolies. 
C) there are legal barriers to entry. 
D) there are no close substitutes for the good or service. 
E) customers have different willingnesses to pay for the good.

Question 9

-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 operated under an average cost pricing rule, how many households in Oakland are served?

Accepted Answer

A) 20,000 
B) 30,000 
C) 40,000 
D) 50,000 
E) None of the above answers is correct. 
A) 20,000 
B) 30,000 
C) 40,000 
D) 50,000 
E) None of the above answers is correct.

Question 10

What is price discrimination?

Accepted Answer

A firm price discriminates when it sells

Question 11

When a firm is regulated so it uses an average cost pricing rule, the price

Accepted Answer

A) exceeds average total cost. 
B) equals marginal cost. 
C) is less than marginal cost. 
D) equals average total cost. 
E) equals marginal revenue. 
A) exceeds average total cost. 
B) equals marginal cost. 
C) is less than marginal cost. 
D) equals average total cost. 
E) equals marginal revenue.

Question 12

-Ron's Hamburger Joint is the only restaurant in town. The above figure represents Ron's cost, the market demand, and marginal revenue curves. Ron operates as a single-price monopoly.
a. How many hamburgers does Ron produce?
b. What price does Ron charge for a hamburger?
c. What is Ron's total revenue?
d. What is his total cost?
e. What is Ron's economic profit?

Accepted Answer

a. Ron produces 20 hamburgers

Question 13

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is

Accepted Answer

A) $60. 
B) $405. 
C) $0. 
D) $210,000. 
E) unknown because more information is needed to determine Paul's profit. 
A) $60. 
B) $405. 
C) $0. 
D) $210,000. 
E) unknown because more information is needed to determine Paul's profit.

Question 14

If a firm successfully price discriminates, it increases i. consumer surplus.
Ii. deadweight loss.
Iii. economic profit.

Accepted Answer

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

Question 15

In equilibrium, rent seeking eliminates the

Accepted Answer

A) deadweight loss. 
B) economic profit. 
C) consumer surplus. 
D) demand for the product. 
E) opportunity to price discriminate. 
A) deadweight loss. 
B) economic profit. 
C) consumer surplus. 
D) demand for the product. 
E) opportunity to price discriminate.

Question 16

Compare and contrast the effect of perfect competition to the effect of perfect price discrimination on:
a. efficiency.
b. consumer surplus.
c. economic profit in the long run.

Accepted Answer

a. Both perfect competition and perfect

Question 17

For a natural monopoly, the efficient quantity is produced when the firm is regulated so that

Accepted Answer

A) P = ATC. B) P > ATC. C) P = MC. D) P > MC. E) P < MC. A) P = ATC. B) P > ATC. C) P = MC. D) P > MC. E) P < MC.

Question 18

The demand curve for a monopoly is

Accepted Answer

A) horizontal because the demand is perfectly elastic. 
B) downward sloping. 
C) vertical because the demand is perfectly inelastic. 
D) upward sloping. 
E) undefined because it is the only supplier in the market. 
A) horizontal because the demand is perfectly elastic. 
B) downward sloping. 
C) vertical because the demand is perfectly inelastic. 
D) upward sloping. 
E) undefined because it is the only supplier in the market.

Question 19

Which of the following is (are)price discrimination?
I. charging different prices based on differences in production cost
Ii. charging business flyers a higher airfare than tourists
Iii. charging more for the first pizza than the second

Accepted Answer

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

Question 20

Is a single-price monopoly efficient?

Accepted Answer

A) Yes, because it creates a deadweight loss. 
B) No, because it creates a deadweight loss. 
C) Yes, because consumers gain and producers lose some of their surpluses. 
D) Yes, because consumers lose and producers gain some of their surpluses. 
E) Yes, because it produces the quantity at which MR=MC. 
A) Yes, because it creates a deadweight loss. 
B) No, because it creates a deadweight loss. 
C) Yes, because consumers gain and producers lose some of their surpluses. 
D) Yes, because consumers lose and producers gain some of their surpluses. 
E) Yes, because it produces the quantity at which MR=MC.

For a single-price monopoly, price is

A profit-maximizing output for a single-price monopoly is determined by the intersection of the curves and the profit-maximizing price is found on the curve.

A monopolist can make an economic profit in the long run because of

A single-price monopoly has a marginal revenue curve that is

Which of the following is correct for a single-price monopoly? I. The firm can determine the quantity it produces and the price it charges. Ii. It would never profitably produce output in the inelastic range of its demand. Iii. Its marginal revenue is less than price.

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost. The monopoly can increase its profit by ________.

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?

Price discrimination is prevented in situations where

What is price discrimination?

When a firm is regulated so it uses an average cost pricing rule, the price

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is

If a firm successfully price discriminates, it increases i. consumer surplus. Ii. deadweight loss. Iii. economic profit.

In equilibrium, rent seeking eliminates the

Compare and contrast the effect of perfect competition to the effect of perfect price discrimination on: a. efficiency. b. consumer surplus. c. economic profit in the long run.

For a natural monopoly, the efficient quantity is produced when the firm is regulated so that

The demand curve for a monopoly is

Which of the following is (are)price discrimination? I. charging different prices based on differences in production cost Ii. charging business flyers a higher airfare than tourists Iii. charging more for the first pizza than the second

Is a single-price monopoly efficient?

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

For a single-price monopoly, price is

A profit-maximizing output for a single-price monopoly is determined by the intersection of the ________ curves and the profit-maximizing price is found on the ________ curve.

A monopolist can make an economic profit in the long run because of

A single-price monopoly has a marginal revenue curve that is

Which of the following is correct for a single-price monopoly? I. The firm can determine the quantity it produces and the price it charges. Ii. It would never profitably produce output in the inelastic range of its demand. Iii. Its marginal revenue is less than price.

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost. The monopoly can increase its profit by ________.

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?

Price discrimination is prevented in situations where

What is price discrimination?

When a firm is regulated so it uses an average cost pricing rule, the price

-The figure above shows the demand, marginal revenue, and marginal cost curves for Paul's Parrot pillows, a single-price monopoly producer of pillows stuffed with parrot feathers. When Paul maximizes his profit, his total economic profit is

If a firm successfully price discriminates, it increases i. consumer surplus. Ii. deadweight loss. Iii. economic profit.

In equilibrium, rent seeking eliminates the

Compare and contrast the effect of perfect competition to the effect of perfect price discrimination on: a. efficiency. b. consumer surplus. c. economic profit in the long run.

For a natural monopoly, the efficient quantity is produced when the firm is regulated so that

The demand curve for a monopoly is

Which of the following is (are)price discrimination? I. charging different prices based on differences in production cost Ii. charging business flyers a higher airfare than tourists Iii. charging more for the first pizza than the second

Is a single-price monopoly efficient?

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

A profit-maximizing output for a single-price monopoly is determined by the intersection of the curves and the profit-maximizing price is found on the curve.