Question 1

The optimal patent length is equal to 20 years.

Accepted Answer

A) True 
 B)False

Question 2

The longer a patent lasts,

Accepted Answer

A)  the greater the potential economic profits available to an innovator. 
B)  the lower the deadweight loss. 
C)  the lower the average costs of production. 
D)  the less innovation there will be. 
A)  the greater the potential economic profits available to an innovator. 
B)  the lower the deadweight loss. 
C)  the lower the average costs of production. 
D)  the less innovation there will be.

Question 3

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Accepted Answer

Microsoft marketed Windows really well a

Question 4

If the inverse demand curve a monopoly faces is p = 100 - 2Q,MC is constant at 16,and the government imposes an $8 per unit specific tax on the monopoly,the deadweight loss solely due to the tax is

Accepted Answer

A)  $88. 
B)  $152. 
C)  $361. 
D)  $441. 
A)  $88. 
B)  $152. 
C)  $361. 
D)  $441.

Question 5

Why is the monopoly total welfare lower than the competitive total welfare?

Accepted Answer

A monopoly restricts output relative to

Question 6

A monopoly incurs a marginal cost of $1 for each unit produced.If the price elasticity of demand equals -2.0,the monopoly maximizes profit by charging a price of

Accepted Answer

A)  $1.00. 
B)  $1.50. 
C)  $2.00. 
D)  $3.00. 
A)  $1.00. 
B)  $1.50. 
C)  $2.00. 
D)  $3.00.

Question 7

-The above figure shows the demand and cost curves facing a monopoly.The monopoly maximizes profit by selling

Accepted Answer

A)  0 units. 
B)  25 units. 
C)  50 units. 
D)  75 units. 
A)  0 units. 
B)  25 units. 
C)  50 units. 
D)  75 units.

Question 8

The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.

Accepted Answer

A) True 
 B)False

Question 9

Suppose a monopolist has TC = 100 + 10Q + 2Q2,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Accepted Answer

First,determine MR = 90 - 4Q.Second,MC =

Question 10

Which of the following total cost functions suggests the presence of a natural monopoly?

Accepted Answer

A)  TC = 2Q 
B)  TC = 100 + 2Q 
C)  TC = 100 + 2Q2 
D)  All of the above. 
A)  TC = 2Q 
B)  TC = 100 + 2Q 
C)  TC = 100 + 2Q2 
D)  All of the above.

Question 11

If the inverse demand curve a monopoly faces is p = 100 - 2Q,and MC is constant at 16,then the firm's Lerner Index equals

Accepted Answer

A)  58/16. 
B)  16/42. 
C)  58/42. 
D)  42/58. 
A)  58/16. 
B)  16/42. 
C)  58/42. 
D)  42/58.

Question 12

Which of the following DOES NOT contribute to the market power of a firm?

Accepted Answer

A)  number of available substitutes 
B)  the color of the product 
C)  legal protections 
D)  the number of firms in the market 
A)  number of available substitutes 
B)  the color of the product 
C)  legal protections 
D)  the number of firms in the market

Question 13

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q2 so that its marginal costs are 2Q,and it has fixed costs of 30.The monopoly's profit-maximizing price is

Accepted Answer

A)  55. 
B)  50. 
C)  45. 
D)  40. 
A)  55. 
B)  50. 
C)  45. 
D)  40.

Question 14

When attempting price regulation,a government faces what problem(s)?

Accepted Answer

A)  limited information 
B)  bribes 
C)  uncooperative firms 
D)  All of the above. 
A)  limited information 
B)  bribes 
C)  uncooperative firms 
D)  All of the above.

Question 15

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q2 so that its marginal costs are 2Q,and it has fixed costs of 30.If a governmental agency imposes an $8 per unit specific tax on output,the deadweight loss from both the monopoly and the tax is

Accepted Answer

A)  $37.50. 
B)  $73.00 
C)  $526.50. 
D)  $562.50. 
A)  $37.50. 
B)  $73.00 
C)  $526.50. 
D)  $562.50.

Question 16

For a monopoly,marginal revenue is less than price because

Accepted Answer

A)  the demand for the firm's output is downward sloping. 
B)  the firm has no supply curve. 
C)  the firm can sell all of its output at any price. 
D)  the demand for the firm's output is perfectly elastic. 
A)  the demand for the firm's output is downward sloping. 
B)  the firm has no supply curve. 
C)  the firm can sell all of its output at any price. 
D)  the demand for the firm's output is perfectly elastic.

Question 17

-The above figure shows the demand and marginal cost curves for a monopoly.The deadweight loss of this monopoly equals

Accepted Answer

A)  h. 
B)  c. 
C)  c + f. 
D)  c + d + e + f. 
A)  h. 
B)  c. 
C)  c + f. 
D)  c + d + e + f.

Question 18

The more elastic the demand curve,a monopoly

Accepted Answer

A)  will have a larger Lerner Index. 
B)  will face a lower marginal cost. 
C)  will earn more profit. 
D)  will lose more sales as it raises its price. 
A)  will have a larger Lerner Index. 
B)  will face a lower marginal cost. 
C)  will earn more profit. 
D)  will lose more sales as it raises its price.

Question 19

A monopoly faces an inverse demand curve of P = 100 - 2Q.The marginal cost curve is MC = .5Q.What government price ceiling would represent optimal price regulation?

Accepted Answer

Setting P = 100 - 2Q

Question 20

Regulation is guaranteed to be more efficient than a monopoly.

Accepted Answer

A)  True, the government is able to internalize the dead weight loss of the monopoly. 
B)  True, the consumers are better off if government provides the product rather than a private firm. 
C)  False, the government does not always have sufficient information to provide a more efficient market outcome. 
D)  False, the consumers are worse off under government regulation. 
A)  True, the government is able to internalize the dead weight loss of the monopoly. 
B)  True, the consumers are better off if government provides the product rather than a private firm. 
C)  False, the government does not always have sufficient information to provide a more efficient market outcome. 
D)  False, the consumers are worse off under government regulation.

The optimal patent length is equal to 20 years.

The longer a patent lasts,

Explain Microsoft Windows' monopoly positions in terms of network externalities.

If the inverse demand curve a monopoly faces is p = 100 - 2Q,MC is constant at 16,and the government imposes an $8 per unit specific tax on the monopoly,the deadweight loss solely due to the tax is

Why is the monopoly total welfare lower than the competitive total welfare?

A monopoly incurs a marginal cost of $1 for each unit produced.If the price elasticity of demand equals -2.0,the monopoly maximizes profit by charging a price of

-The above figure shows the demand and cost curves facing a monopoly.The monopoly maximizes profit by selling

The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.

Suppose a monopolist has TC = 100 + 10Q + 2Q²,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Which of the following total cost functions suggests the presence of a natural monopoly?

If the inverse demand curve a monopoly faces is p = 100 - 2Q,and MC is constant at 16,then the firm's Lerner Index equals

Which of the following DOES NOT contribute to the market power of a firm?

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q² so that its marginal costs are 2Q,and it has fixed costs of 30.The monopoly's profit-maximizing price is

When attempting price regulation,a government faces what problem(s)?

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q² so that its marginal costs are 2Q,and it has fixed costs of 30.If a governmental agency imposes an $8 per unit specific tax on output,the deadweight loss from both the monopoly and the tax is

For a monopoly,marginal revenue is less than price because

-The above figure shows the demand and marginal cost curves for a monopoly.The deadweight loss of this monopoly equals

The more elastic the demand curve,a monopoly

A monopoly faces an inverse demand curve of P = 100 - 2Q.The marginal cost curve is MC = .5Q.What government price ceiling would represent optimal price regulation?

Regulation is guaranteed to be more efficient than a monopoly.

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 11: Monopoly

The optimal patent length is equal to 20 years.

The longer a patent lasts,

Explain Microsoft Windows' monopoly positions in terms of network externalities.

If the inverse demand curve a monopoly faces is p = 100 - 2Q,MC is constant at 16,and the government imposes an $8 per unit specific tax on the monopoly,the deadweight loss solely due to the tax is

Why is the monopoly total welfare lower than the competitive total welfare?

A monopoly incurs a marginal cost of $1 for each unit produced.If the price elasticity of demand equals -2.0,the monopoly maximizes profit by charging a price of

-The above figure shows the demand and cost curves facing a monopoly.The monopoly maximizes profit by selling

The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.

Suppose a monopolist has TC = 100 + 10Q + 2Q2,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Which of the following total cost functions suggests the presence of a natural monopoly?

If the inverse demand curve a monopoly faces is p = 100 - 2Q,and MC is constant at 16,then the firm's Lerner Index equals

Which of the following DOES NOT contribute to the market power of a firm?

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q2 so that its marginal costs are 2Q,and it has fixed costs of 30.The monopoly's profit-maximizing price is

When attempting price regulation,a government faces what problem(s)?

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q2 so that its marginal costs are 2Q,and it has fixed costs of 30.If a governmental agency imposes an $8 per unit specific tax on output,the deadweight loss from both the monopoly and the tax is

For a monopoly,marginal revenue is less than price because

-The above figure shows the demand and marginal cost curves for a monopoly.The deadweight loss of this monopoly equals

The more elastic the demand curve,a monopoly

A monopoly faces an inverse demand curve of P = 100 - 2Q.The marginal cost curve is MC = .5Q.What government price ceiling would represent optimal price regulation?

Regulation is guaranteed to be more efficient than a monopoly.

Introduction

Supply and Demand

Applying the Supply-And-Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Suppose a monopolist has TC = 100 + 10Q + 2Q²,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q² so that its marginal costs are 2Q,and it has fixed costs of 30.The monopoly's profit-maximizing price is

A monopolist faces the inverse demand curve P = 60 - Q.It has variable costs of Q² so that its marginal costs are 2Q,and it has fixed costs of 30.If a governmental agency imposes an $8 per unit specific tax on output,the deadweight loss from both the monopoly and the tax is