Question 1

-The figure above shows a monopoly firm's demand curve. At point t

Accepted Answer

A)  demand is elastic. 
B)  demand is unit elastic. 
C)  demand is inelastic. 
D)  total revenue is at a minimum. 
A)  demand is elastic. 
B)  demand is unit elastic. 
C)  demand is inelastic. 
D)  total revenue is at a minimum.

Question 2

For a single-price monopolist that is maximizing profit, the price is

Accepted Answer

A)  less than marginal revenue. 
B)  equal to marginal revenue. 
C)  equal to marginal cost. 
D)  greater than marginal cost. 
A)  less than marginal revenue. 
B)  equal to marginal revenue. 
C)  equal to marginal cost. 
D)  greater than marginal cost.

Question 3

-The table above gives the demand for a monopolist's output. Between which two quantities is marginal revenue equal to 0?

Accepted Answer

A)  4 and 5 
B)  3 and 4 
C)  2 and 3 
D)  1 and 2 
A)  4 and 5 
B)  3 and 4 
C)  2 and 3 
D)  1 and 2

Question 4

If marginal revenue is greater than zero, then demand at this level of output is

Accepted Answer

A)  unit elastic. 
B)  elastic. 
C)  inelastic. 
D)  steeper than the marginal revenue curve. 
A)  unit elastic. 
B)  elastic. 
C)  inelastic. 
D)  steeper than the marginal revenue curve.

Question 5

-If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then consumer surplus will be

Accepted Answer

A)  $0. 
B)  $8 million. 
C)  $9 million. 
D)  $16 million. 
A)  $0. 
B)  $8 million. 
C)  $9 million. 
D)  $16 million.

Question 6

A monopolist can set any price it wants. So why does it still produce at a point where MC=MR, just like a perfectly competitive firm?

Accepted Answer

The point where MC = MR maximizes any fi

Question 7

Compare the consumer surplus in a perfect competition with that of a single-price monopoly and with a price-discriminating monopoly.

Accepted Answer

The consumer surplus in a perfect compet

Question 8

What is an average cost pricing rule? Why do regulatory agencies use it for natural monopolies?

Accepted Answer

Average cost pricing means that the firm

Question 9

A price discriminating monopolist charges lower prices to customers with

Accepted Answer

A)  lower supply elasticities. 
B)  higher supply elasticities. 
C)  lower willingness to pay. 
D)  higher willingness to pay. 
A)  lower supply elasticities. 
B)  higher supply elasticities. 
C)  lower willingness to pay. 
D)  higher willingness to pay.

Question 10

-The table above shows the demand and costs for a single-price monopolist. The firm will

Accepted Answer

A)  maximize profit by producing 3 units. 
B)  maximize profit by producing 2 units. 
C)  operate on the inelastic portion of its demand curve. 
D)  operate on the unit elastic portion of its demand curve. 
A)  maximize profit by producing 3 units. 
B)  maximize profit by producing 2 units. 
C)  operate on the inelastic portion of its demand curve. 
D)  operate on the unit elastic portion of its demand curve.

Question 11

The capture theory holds that regulations are supplied to maximize ________.

Accepted Answer

A)  total sales 
B)  economic profit 
C)  marginal product 
D)  consumer surplus 
A)  total sales 
B)  economic profit 
C)  marginal product 
D)  consumer surplus

Question 12

The social interest theory of regulation assumes that

Accepted Answer

A)  regulations maximize consumer surplus. 
B)  regulations set price equal to average total revenue. 
C)  public officials seek to minimize deadweight loss. 
D)  public officials seek gain through regulation for only their own constituents. 
A)  regulations maximize consumer surplus. 
B)  regulations set price equal to average total revenue. 
C)  public officials seek to minimize deadweight loss. 
D)  public officials seek gain through regulation for only their own constituents.

Question 13

The WaveHouse on Mission Beach in San Diego features the Bruticus Maximus, a ten foot wave, which tests the skills of even the most talented surf and wake board riders on the planet. WaveHouse is the only place in San Diego where this service is offered. You can ride B. Max for $40 for the first hour, $33 for the second hour, and $26 for the third hour. An effect of this price discrimination is that

Accepted Answer

A)  consumer surplus increases. 
B)  deadweight loss increases. 
C)  consumer surplus is completely eliminated. 
D)  producer profit increases. 
A)  consumer surplus increases. 
B)  deadweight loss increases. 
C)  consumer surplus is completely eliminated. 
D)  producer profit increases.

Question 14

-If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be

Accepted Answer

A)  $0. 
B)  $2 million. 
C)  $4 million. 
D)  $8 million. 
A)  $0. 
B)  $2 million. 
C)  $4 million. 
D)  $8 million.

Question 15

An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will

Accepted Answer

A)  raise its price and decrease its output. 
B)  lower its price and increase its output. 
C)  raise its price and increase its output. 
D)  continue to produce this level of output because any change will lower its profit. 
A)  raise its price and decrease its output. 
B)  lower its price and increase its output. 
C)  raise its price and increase its output. 
D)  continue to produce this level of output because any change will lower its profit.

Question 16

When an average total cost pricing rule is enforced, average total cost equals ________.

Accepted Answer

A)  marginal revenue 
B)  total revenue 
C)  price 
D)  average total cost 
A)  marginal revenue 
B)  total revenue 
C)  price 
D)  average total cost

Question 17

In July 2008, the Federal Communications Commission approved the merger of satellite radio providers XM Satellite and Sirius Satellite Radio, establishing a single satellite radio company in America. If the new company was a natural monopoly, which of the following would be a regulation to ensure an efficient quantity of satellite radio service?

Accepted Answer

A)  application of the average cost pricing rule 
B)  government subsidization 
C)  government taxation 
D)  application of the marginal cost pricing rule 
A)  application of the average cost pricing rule 
B)  government subsidization 
C)  government taxation 
D)  application of the marginal cost pricing rule

Question 18

-The table above gives the demand for a monopolist's output. What is the marginal revenue of increasing production from 4 to 5 units?

Accepted Answer

A)  $70 
B)  $16 
C)  $14 
D)  $6 
A)  $70 
B)  $16 
C)  $14 
D)  $6

Question 19

-In the above figure, the total revenue for a single-price monopolist is shown by the area

Accepted Answer

A)  0P5fQ1. 
B)  P2P4eb. 
C)  0P3cQ1. 
D)  0P4eQ3. 
A)  0P5fQ1. 
B)  P2P4eb. 
C)  0P3cQ1. 
D)  0P4eQ3.

Question 20

A profit maximizing single-price monopolist sets price equal to marginal cost.

Accepted Answer

A) True 
 B)False

-The figure above shows a monopoly firm's demand curve. At point t

For a single-price monopolist that is maximizing profit, the price is

-The table above gives the demand for a monopolist's output. Between which two quantities is marginal revenue equal to 0?

If marginal revenue is greater than zero, then demand at this level of output is

-If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then consumer surplus will be

A monopolist can set any price it wants. So why does it still produce at a point where MC=MR, just like a perfectly competitive firm?

Compare the consumer surplus in a perfect competition with that of a single-price monopoly and with a price-discriminating monopoly.

What is an average cost pricing rule? Why do regulatory agencies use it for natural monopolies?

A price discriminating monopolist charges lower prices to customers with

-The table above shows the demand and costs for a single-price monopolist. The firm will

The capture theory holds that regulations are supplied to maximize ________.

The social interest theory of regulation assumes that

-If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be

An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will

When an average total cost pricing rule is enforced, average total cost equals ________.

-The table above gives the demand for a monopolist's output. What is the marginal revenue of increasing production from 4 to 5 units?

-In the above figure, the total revenue for a single-price monopolist is shown by the area

A profit maximizing single-price monopolist sets price equal to marginal cost.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 13: Monopoly

-The figure above shows a monopoly firm's demand curve. At point t

For a single-price monopolist that is maximizing profit, the price is

-The table above gives the demand for a monopolist's output. Between which two quantities is marginal revenue equal to 0?

If marginal revenue is greater than zero, then demand at this level of output is

-If an average cost pricing rule is imposed on the natural monopoly shown in the figure above, then consumer surplus will be

A monopolist can set any price it wants. So why does it still produce at a point where MC=MR, just like a perfectly competitive firm?

Compare the consumer surplus in a perfect competition with that of a single-price monopoly and with a price-discriminating monopoly.

What is an average cost pricing rule? Why do regulatory agencies use it for natural monopolies?

A price discriminating monopolist charges lower prices to customers with

-The table above shows the demand and costs for a single-price monopolist. The firm will

The capture theory holds that regulations are supplied to maximize ________.

The social interest theory of regulation assumes that

-If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be

An unregulated monopoly finds that its marginal cost exceeds its marginal revenue. In order to increase its profit, the firm will

When an average total cost pricing rule is enforced, average total cost equals ________.

-The table above gives the demand for a monopolist's output. What is the marginal revenue of increasing production from 4 to 5 units?

-In the above figure, the total revenue for a single-price monopolist is shown by the area

A profit maximizing single-price monopolist sets price equal to marginal cost.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters