Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class. \[\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservutian Price } \\ \text { (S/Bank) } \end{array} \\ \hline \mathrm { Q } & 60 \\ \hline \mathrm { R } & 54 \\ \hline \mathrm { S } & 48 \\ \hline \mathrm { T } & 42 \\ \hline \mathrm { U } & 36 \\ \hline \mathrm { V } & 30 \\ \hline \mathrm { W } & 24 \\ \hline \mathrm { X } & 18 \\ \hline \end{array}\] What is the socially optimal number of books?

A) 8 B) 5 C) 6 D) 7 A) 8 B) 5 C) 6 D) 7

Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. \[\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservetion Price } \\ \text { (\$ /Rental) } \end{array} \\ \hline \mathrm { A } & 22 \\ \hline \mathrm { B } & 16 \\ \hline \mathrm { C } & 12 \\ \hline \mathrm { D } & \mathrm { 8 } \\ \hline \mathrm { E } & 6 \\ \hline \mathrm { F } & 4 \\ \hline \end{array}\] Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the morning, it will rent out ________ bike(s)and charge ________ per bike.

A) 1; $22 B) 2; $16 C) 3; $12 D) 4; $8 A) 1; $22 B) 2; $16 C) 3; $12 D) 4; $8

Suppose Lydia owns the only lawn-mowing business in the small town of Pleasant Pastures. There are 8 people each week whose lawns she might cut, each with a reservation price given in the accompanying table. Assume that the marginal cost of mowing each lawn is constant and equal to $25. \[\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservition } \\ \text { Price } \end{array} \\ \hline \mathrm { A } & \$ 36 \\ \hline \mathrm { B } & \$ 34 \\ \hline \mathrm { C } & \$ 32 \\ \hline \mathrm { D } & \$ 30 \\ \hline \mathrm { E } & \$ 28 \\ \hline \mathrm { F } & \$ 26 \\ \hline \mathrm { G } & \$ 24 \\ \hline \mathrm { H } & \$ 22 \\ \hline \end{array}\] If Lydia charges the same price to all of her customers, then how many lawns should she mow each week?

A) 2 B) 3 C) 4 D) 5 A) 2 B) 3 C) 4 D) 5

Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist. \[\begin{array} { | c | c | } \hline \text { Quntity } & \text { Price } \\ \hline 1 & \$ 10 \\ \hline 2 & \$ 9 \\ \hline 3 & \$ 8 \\ \hline 4 & \$ 7 \\ \hline 5 & \$ 6 \\ \hline 6 & \$ 5 \\ \hline 7 & \$ 4 \\ \hline 8 & \$ 3 \\ \hline \end{array}\] The marginal revenue of the third unit of output is:

A) $24. B) $8. C) $6. D) ?$1. A) $24. B) $8. C) $6. D) ?$1.

Suppose Lydia owns the only lawn-mowing business in the small town of Pleasant Pastures. There are 8 people each week whose lawns she might cut, each with a reservation price given in the accompanying table. Assume that the marginal cost of mowing each lawn is constant and equal to $25. \[\begin{array} { | c | c | } \hline \text { Custamer } & \begin{array} { c } \text { Reservition } \\ \text { Price } \end{array} \\ \hline \mathrm { A } & \$ 36 \\ \hline \mathrm { B } & \$ 34 \\ \hline \mathrm { C } & \$ 32 \\ \hline \mathrm { D } & \$ 30 \\ \hline \mathrm { E } & \$ 28 \\ \hline \mathrm { F } & \$ 26 \\ \hline \mathrm { G } & \$ 24 \\ \hline \mathrm { H } & \$ 22 \\ \hline \end{array}\] If Lydia charges the same price to all of her customers, then what price should she charge if she wants to maximize her profit.

A) $34 B) $30 C) $26 D) $32 A) $34 B) $30 C) $26 D) $32

Exam 8: Monopoly, Oligopoly, and Monopolistic Competition

If a firm collects $80 in revenue when it sells 4 units, $100 in revenue when it sells 5 units, and $120 in revenue when it sells 6 units, then one can infer the firm is a(n):

(Multiple Choice)

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Question 101

"Market power" refers to a firm's ability to:

(Multiple Choice)

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Question 102

Suppose Campus Books, a profit-maximizing firm, is the only supplier of the textbook for a given class. The marginal cost of supplying each book is constant and equal to $10, and Campus Books has no fixed costs. The table shows the reservation prices of the eight students enrolled in the class. Custamer Reservutian Price (S/Bank) 60 54 48 42 36 30 24 18 What is the socially optimal number of books?

(Multiple Choice)

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Question 103

Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed in the table. Custamer Reservetion Price (\ /Rental) 22 16 12 6 4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the morning, it will rent out bike(s)and charge per bike.

(Multiple Choice)

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Question 104

Given the total cost function TC = 2,000 + 2Q, when output is 1,000 units average total cost is and total fixed cost is .

(Multiple Choice)

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Question 105

The monopolist will maximize profits at the output level for which:

(Multiple Choice)

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Question 106

Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q has a higher fixed cost and has a higher marginal cost.

(Multiple Choice)

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Question 107

Suppose a firm's total revenue is $100 when it sells 10 units, and $110 when it sells 11 units. The firm, therefore, is a(n):

(Multiple Choice)

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Question 108

The accompanying figure shows the demand curve, marginal revenue curve, marginal cost curve and average total cost curve for a monopolist. At this monopolist's profit-maximizing level of output, it:

(Multiple Choice)

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Question 109

Which of the following industries does not fit the natural monopoly model?

(Multiple Choice)

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Question 110

For perfectly competitive firms, marginal revenue price; for monopolists marginal revenue price.

(Multiple Choice)

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Question 111

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. At this monopolist's profit-maximizing level of output, consumer surplus is ________.

(Multiple Choice)

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Question 112

Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars)is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. As you increase your production of t-shirts, your average fixed cost and your marginal cost .

(Multiple Choice)

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Question 113

Suppose Lydia owns the only lawn-mowing business in the small town of Pleasant Pastures. There are 8 people each week whose lawns she might cut, each with a reservation price given in the accompanying table. Assume that the marginal cost of mowing each lawn is constant and equal to $25. Custamer Reservition Price \ 36 \ 34 \ 32 \ 30 \ 28 \ 26 \ 24 \ 22 If Lydia charges the same price to all of her customers, then how many lawns should she mow each week?

(Multiple Choice)

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Question 114

Suppose a monopolist faces the following demand curve. If you were to draw the monopolist's marginal revenue curve, it would:

(Multiple Choice)

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Question 115

Refer to the accompanying figure. This firm's marginal revenue curve would intersect the vertical axis at ________.

(Multiple Choice)

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Question 116

Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist. Quntity Price 1 \ 10 2 \ 9 3 \ 8 4 \ 7 5 \ 6 6 \ 5 7 \ 4 8 \ 3 The marginal revenue of the third unit of output is:

(Multiple Choice)

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Question 117

Suppose Lydia owns the only lawn-mowing business in the small town of Pleasant Pastures. There are 8 people each week whose lawns she might cut, each with a reservation price given in the accompanying table. Assume that the marginal cost of mowing each lawn is constant and equal to $25. Custamer Reservition Price \ 36 \ 34 \ 32 \ 30 \ 28 \ 26 \ 24 \ 22 If Lydia charges the same price to all of her customers, then what price should she charge if she wants to maximize her profit.

(Multiple Choice)

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Question 118

If a firm faces a downward-sloping demand curve, then:

(Multiple Choice)

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Question 119

Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q For both firms, average total cost:

(Multiple Choice)

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Question 120

Exam 8: Monopoly, Oligopoly, and Monopolistic Competition

If a firm collects $80 in revenue when it sells 4 units, $100 in revenue when it sells 5 units, and $120 in revenue when it sells 6 units, then one can infer the firm is a(n):

"Market power" refers to a firm's ability to:

Given the total cost function TC = 2,000 + 2Q, when output is 1,000 units average total cost is ________ and total fixed cost is ________.

The monopolist will maximize profits at the output level for which:

Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q ________ has a higher fixed cost and ________ has a higher marginal cost.

Suppose a firm's total revenue is $100 when it sells 10 units, and $110 when it sells 11 units. The firm, therefore, is a(n):

The accompanying figure shows the demand curve, marginal revenue curve, marginal cost curve and average total cost curve for a monopolist. At this monopolist's profit-maximizing level of output, it:

Which of the following industries does not fit the natural monopoly model?

For perfectly competitive firms, marginal revenue ________ price; for monopolists marginal revenue ________ price.

Suppose the accompanying figure shows the demand curve, marginal revenue curve and marginal cost curve for a monopolist. At this monopolist's profit-maximizing level of output, consumer surplus is ________.

Suppose a monopolist faces the following demand curve. If you were to draw the monopolist's marginal revenue curve, it would:

Refer to the accompanying figure. This firm's marginal revenue curve would intersect the vertical axis at ________.

Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist. Quntity Price 1 \ 10 2 \ 9 3 \ 8 4 \ 7 5 \ 6 6 \ 5 7 \ 4 8 \ 3 The marginal revenue of the third unit of output is:

If a firm faces a downward-sloping demand curve, then:

Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q For both firms, average total cost:

Thinking Like an Economist

Comparative Advantage

Supply and Demand

Elasticity

Demand

Perfectly Competitive Supply

Efficiency, Exchange, and the Invisible Hand in Action

Games and Strategic Behavior

An Introduction to Behavioral Economics

Externalities, Property Rights, and the Environment

The Economics of Information

Labor Markets, Poverty, and Income Distribution

Public Goods and Tax Policy

International Trade and Trade Policy

Macroeconomics: The Birds Eye View of the Economy

Measuring Economic Activity: GDP and Unemployment

Measuring the Price Level and Inflation

Economic Growth, Productivity, and Living Standards

The Labor Market: Workers, Wages, and Unemployment

Saving and Capital Formation

Money Prices and the Federal Reserve

Financial Markets and International Capital Flows

Short-Term Economic Fluctuations: An Introduction

Spending and Output in the Short Run

Stabilizing the Economy: The Role of the Fed

Aggregate Demand, Aggregate Supply, and Inflation

Exchange Rates and the Open Economy

Filters

Given the total cost function TC = 2,000 + 2Q, when output is 1,000 units average total cost is and total fixed cost is .

Consider an industry with two firms producing similar products. Each firm's total cost (in dollars)is given below. Mega Corp: TC = 5,000 + 100Q Big Inc: TC = 4,000 + 200Q has a higher fixed cost and has a higher marginal cost.

For perfectly competitive firms, marginal revenue price; for monopolists marginal revenue price.