Question 1

Public franchises create monopolies by restricting

Accepted Answer

A)  demand. 
B)  prices. 
C)  entry. 
D)  profit. 
A)  demand. 
B)  prices. 
C)  entry. 
D)  profit.

Question 2

Compared to a similar perfectly competitive industry, a single-price monopoly

Accepted Answer

A)  creates a deadweight loss and decreases economic profit. 
B)  produces more output. 
C)  creates a deadweight loss and decreases consumer surplus. 
D)  is more efficient because there is no wasteful competition. 
A)  creates a deadweight loss and decreases economic profit. 
B)  produces more output. 
C)  creates a deadweight loss and decreases consumer surplus. 
D)  is more efficient because there is no wasteful competition.

Question 3

Compared to a single-price monopoly, the output of a perfectly competitive market with the same costs

Accepted Answer

A)  is more than the monopoly's output. 
B)  is the same as the monopoly's output. 
C)  is less than the monopoly's output. 
D)  could be more than, less than, or equal to the monopoly's output. 
A)  is more than the monopoly's output. 
B)  is the same as the monopoly's output. 
C)  is less than the monopoly's output. 
D)  could be more than, less than, or equal to the monopoly's output.

Question 4

If a monopolist was operating in a price range where marginal revenue was negative, it would be

Accepted Answer

A)  in the inelastic range of the demand for its product. 
B)  in the unit elastic range of the demand for its product. 
C)  in the elastic range of the demand for its product. 
D)  maximizing revenue but not profits. 
A)  in the inelastic range of the demand for its product. 
B)  in the unit elastic range of the demand for its product. 
C)  in the elastic range of the demand for its product. 
D)  maximizing revenue but not profits.

Question 5

A rule that specifies the highest price that a regulated firm is permitted to set is called

Accepted Answer

A)  rate of return regulation. 
B)  price cap regulation. 
C)  maximum price regulation. 
D)  average/marginal cost pricing. 
A)  rate of return regulation. 
B)  price cap regulation. 
C)  maximum price regulation. 
D)  average/marginal cost pricing.

Question 6

A single-price monopolist will always produce where the elasticity of demand

Accepted Answer

A)  is greater than 1. 
B)  is smaller than 1. 
C)  equals 1. 
D)  equals infinity. 
A)  is greater than 1. 
B)  is smaller than 1. 
C)  equals 1. 
D)  equals infinity.

Question 7

Using average cost pricing to regulate a natural monopoly creates a deadweight loss.

Accepted Answer

A) True 
 B)False

Question 8

-In the figure above, the deadweight loss when the market is a single-price monopoly rather than perfectly competitive is the area of

Accepted Answer

A)  triangle aeb. 
B)  triangle aic. 
C)  triangle eig. 
D)  triangle eif. 
A)  triangle aeb. 
B)  triangle aic. 
C)  triangle eig. 
D)  triangle eif.

Question 9

-If the natural monopoly shown in the figure above is unregulated, it will sell

Accepted Answer

A)  2 million units. 
B)  3 million units. 
C)  4 million units. 
D)  5 million units. 
A)  2 million units. 
B)  3 million units. 
C)  4 million units. 
D)  5 million units.

Question 10

-The above table gives a monopolist's demand schedule. Complete the table by calculating the total revenue and the marginal revenue.

Accepted Answer

@#IMG-DLM& The compl

Question 11

Which creates a larger deadweight loss, perfect competition or a single-price monopoly?

Accepted Answer

The single-price monopoly crea

Question 12

Donna owns the only dog grooming salon on Lonely Island. If Donna can price discriminate between dog owners who are seniors and those who are not, her economic profit will be ________ than if she does not price discriminate and the number of dog groomings will be ________ than if she does not price discriminate.

Accepted Answer

A)  greater; more 
B)  greater; less 
C)  less; more 
D)  less; less 
A)  greater; more 
B)  greater; less 
C)  less; more 
D)  less; less

Question 13

A monopoly is best defined as a firm that

Accepted Answer

A)  produces a good or service for which no close substitute exists and which is protected by a barrier that prevents other firms from selling that good or service. 
B)  purchases its resources from only one supplier because of a barrier preventing it from buying from other suppliers. 
C)  produces a good or service for which no close substitute exists and that sells all its output to one buyer because there is barrier preventing other buyers from purchasing the good or service. 
D)  cannot control the price it sets for its good or service because there is barrier that prevents the firm from changing the price. 
A)  produces a good or service for which no close substitute exists and which is protected by a barrier that prevents other firms from selling that good or service. 
B)  purchases its resources from only one supplier because of a barrier preventing it from buying from other suppliers. 
C)  produces a good or service for which no close substitute exists and that sells all its output to one buyer because there is barrier preventing other buyers from purchasing the good or service. 
D)  cannot control the price it sets for its good or service because there is barrier that prevents the firm from changing the price.

Question 14

-Which area in the above figure shows the consumer surplus at the price and quantity that would be attained if the industry were perfectly competitive?

Accepted Answer

A)  A + B + C + D 
B)  A + B + C + D + E 
C)  F + G + H 
D)  A + B + C + D + E + F + G + H 
A)  A + B + C + D 
B)  A + B + C + D + E 
C)  F + G + H 
D)  A + B + C + D + E + F + G + H

Question 15

In the monopoly, the firm's marginal revenue curve is ________, while in a perfectly competitive market, each firm's marginal revenue curve is ________.

Accepted Answer

A)  downward sloping; horizontal 
B)  horizontal; downward sloping 
C)  upward sloping; horizontal 
D)  downward sloping; upward sloping 
A)  downward sloping; horizontal 
B)  horizontal; downward sloping 
C)  upward sloping; horizontal 
D)  downward sloping; upward sloping

Question 16

Compared to a perfectly competitive industry, a single-price monopoly with the same costs will

Accepted Answer

A)  create less consumer surplus. 
B)  create less economic profit. 
C)  create a deadweight loss. 
D)  Both answers A and C are correct. 
A)  create less consumer surplus. 
B)  create less economic profit. 
C)  create a deadweight loss. 
D)  Both answers A and C are correct.

Question 17

-Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals could perfectly price discriminate, then which of the following is TRUE?

Accepted Answer

A)  It would produce and sell 16 million inhalers. 
B)  Inhalers would sell for $5 each. 
C)  Inhalers would sell for $2 each. 
D)  None of the above answers is correct. 
A)  It would produce and sell 16 million inhalers. 
B)  Inhalers would sell for $5 each. 
C)  Inhalers would sell for $2 each. 
D)  None of the above answers is correct.

Question 18

A natural monopoly that charges the profit-maximizing price will produce ________ amount of output than a ________.

Accepted Answer

A)  a larger; natural monopoly regulated with an average cost pricing rule 
B)  a more efficient; perfectly competitive industry 
C)  the same; natural monopoly regulated with a marginal cost pricing rule 
D)  a smaller; natural monopoly regulated with a marginal cost pricing rule 
A)  a larger; natural monopoly regulated with an average cost pricing rule 
B)  a more efficient; perfectly competitive industry 
C)  the same; natural monopoly regulated with a marginal cost pricing rule 
D)  a smaller; natural monopoly regulated with a marginal cost pricing rule

Question 19

-In the figure above, the total revenue of a perfectly price-discriminating monopolist at the profit-maximizing output is equal to the area of

Accepted Answer

A)  0aij. 
B)  0dgh. 
C)  aci. 
D)  obeij. 
A)  0aij. 
B)  0dgh. 
C)  aci. 
D)  obeij.

Question 20

Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of

Accepted Answer

A)  a marginal cost pricing rule. 
B)  an average cost pricing rule. 
C)  price discrimination. 
D)  perfect price discrimination. 
A)  a marginal cost pricing rule. 
B)  an average cost pricing rule. 
C)  price discrimination. 
D)  perfect price discrimination.

Public franchises create monopolies by restricting

Compared to a similar perfectly competitive industry, a single-price monopoly

Compared to a single-price monopoly, the output of a perfectly competitive market with the same costs

If a monopolist was operating in a price range where marginal revenue was negative, it would be

A rule that specifies the highest price that a regulated firm is permitted to set is called

A single-price monopolist will always produce where the elasticity of demand

Using average cost pricing to regulate a natural monopoly creates a deadweight loss.

-In the figure above, the deadweight loss when the market is a single-price monopoly rather than perfectly competitive is the area of

-If the natural monopoly shown in the figure above is unregulated, it will sell

-The above table gives a monopolist's demand schedule. Complete the table by calculating the total revenue and the marginal revenue.

Which creates a larger deadweight loss, perfect competition or a single-price monopoly?

Donna owns the only dog grooming salon on Lonely Island. If Donna can price discriminate between dog owners who are seniors and those who are not, her economic profit will be than if she does not price discriminate and the number of dog groomings will be than if she does not price discriminate.

A monopoly is best defined as a firm that

-Which area in the above figure shows the consumer surplus at the price and quantity that would be attained if the industry were perfectly competitive?

In the monopoly, the firm's marginal revenue curve is , while in a perfectly competitive market, each firm's marginal revenue curve is .

Compared to a perfectly competitive industry, a single-price monopoly with the same costs will

A natural monopoly that charges the profit-maximizing price will produce amount of output than a .

-In the figure above, the total revenue of a perfectly price-discriminating monopolist at the profit-maximizing output is equal to the area of

Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of

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

Public franchises create monopolies by restricting

Compared to a similar perfectly competitive industry, a single-price monopoly

Compared to a single-price monopoly, the output of a perfectly competitive market with the same costs

If a monopolist was operating in a price range where marginal revenue was negative, it would be

A rule that specifies the highest price that a regulated firm is permitted to set is called

A single-price monopolist will always produce where the elasticity of demand

Using average cost pricing to regulate a natural monopoly creates a deadweight loss.

-In the figure above, the deadweight loss when the market is a single-price monopoly rather than perfectly competitive is the area of

-If the natural monopoly shown in the figure above is unregulated, it will sell

-The above table gives a monopolist's demand schedule. Complete the table by calculating the total revenue and the marginal revenue.

Which creates a larger deadweight loss, perfect competition or a single-price monopoly?

A monopoly is best defined as a firm that

-Which area in the above figure shows the consumer surplus at the price and quantity that would be attained if the industry were perfectly competitive?

In the monopoly, the firm's marginal revenue curve is ________, while in a perfectly competitive market, each firm's marginal revenue curve is ________.

Compared to a perfectly competitive industry, a single-price monopoly with the same costs will

A natural monopoly that charges the profit-maximizing price will produce ________ amount of output than a ________.

-In the figure above, the total revenue of a perfectly price-discriminating monopolist at the profit-maximizing output is equal to the area of

Joe, a hair dresser, offers students a discount price on haircuts. This form of pricing is an example of

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

In the monopoly, the firm's marginal revenue curve is , while in a perfectly competitive market, each firm's marginal revenue curve is .

A natural monopoly that charges the profit-maximizing price will produce amount of output than a .