Question 1

Sizable economic profits can persist over time under monopoly if the monopolist

Accepted Answer

A)  produces that output where average total cost is at a maximum. 
B)  is protected by barriers to entry. 
C)  operates as a price taker rather than a price maker. 
D)  earns revenues that exceed variable costs. 
A)  produces that output where average total cost is at a maximum. 
B)  is protected by barriers to entry. 
C)  operates as a price taker rather than a price maker. 
D)  earns revenues that exceed variable costs.

Question 2

Figure 15-23  
-Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Accepted Answer

The answer of Figure 15-23  
-Refer to Figure 15-23....

Question 3

Authors are allowed to be monopolists in the sale of their books in order to

Accepted Answer

A)  encourage authors to write more and better books. 
B)  correct for the negative externalities that the Internet and television impose. 
C)  satisfy literary advocacy groups that exercise their lobbying power. 
D)  promote a society in which people think for themselves and learn from whichever books they please. 
A)  encourage authors to write more and better books. 
B)  correct for the negative externalities that the Internet and television impose. 
C)  satisfy literary advocacy groups that exercise their lobbying power. 
D)  promote a society in which people think for themselves and learn from whichever books they please.

Question 4

Price discrimination is the business practice of

Accepted Answer

A)  bundling related products to increase total sales. 
B)  selling the same good at different prices to different customers. 
C)  pricing above marginal cost. 
D)  hiring marketing experts to increase consumers' brand loyalty. 
A)  bundling related products to increase total sales. 
B)  selling the same good at different prices to different customers. 
C)  pricing above marginal cost. 
D)  hiring marketing experts to increase consumers' brand loyalty.

Question 5

Additional firms often do not try to compete with a natural monopoly because

Accepted Answer

A)  they fear retaliation in the form of pricing wars from the natural monopolist. 
B)  they are unsure of the size of the market in general. 
C)  they know they cannot achieve the same low costs that the natural monopolist enjoys. 
D)  the natural monopoly does not make a large profit. 
A)  they fear retaliation in the form of pricing wars from the natural monopolist. 
B)  they are unsure of the size of the market in general. 
C)  they know they cannot achieve the same low costs that the natural monopolist enjoys. 
D)  the natural monopoly does not make a large profit.

Question 6

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
  
-Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Accepted Answer

A)  The firm saves $15. 
B)  $15 
C)  $30 
D)  $40 
A)  The firm saves $15. 
B)  $15 
C)  $30 
D)  $40

Question 7

If the government deems a newly-invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Accepted Answer

A) True 
 B)False

Question 8

A monopolist's supply curve is horizontal.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not an example of price discrimination?

Accepted Answer

A)  A movie theater charges a lower price for a child's ticket than for an adult's ticket. 
B)  A university rebates part of the cost of tuition in the form of financial aid for needy students. 
C)  A local pizza chain offers a "buy three get one free" deal. 
D)  An ice cream parlor charges a higher price for ice cream than for sherbet. 
A)  A movie theater charges a lower price for a child's ticket than for an adult's ticket. 
B)  A university rebates part of the cost of tuition in the form of financial aid for needy students. 
C)  A local pizza chain offers a "buy three get one free" deal. 
D)  An ice cream parlor charges a higher price for ice cream than for sherbet.

Question 10

Table 15-4
A monopolist faces the following demand curve:
  
-Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

Accepted Answer

A)  $12.50 
B)  $5 
C)  -$5 
D)  -$12.50 
A)  $12.50 
B)  $5 
C)  -$5 
D)  -$12.50

Question 11

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Accepted Answer

A)  $22. 
B)  $27. 
C)  $54. 
D)  $108. 
A)  $22. 
B)  $27. 
C)  $54. 
D)  $108.

Question 12

Figure 15-14  
-Refer to Figure 15-14. A benevolent social planner would have the monopoly operate at an output level

Accepted Answer

A)  less than Q0. 
B)  greater than Q0. 
C)  equal to Q0. 
D)  equal to zero. 
A)  less than Q0. 
B)  greater than Q0. 
C)  equal to Q0. 
D)  equal to zero.

Question 13

Scenario 15-9
Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppose the executives also know that 200 students are willing to pay $8 for admission on a weekday. The cost of operating the museum on a weekday is $2,000.
-Refer to Scenario 15-9. How much profit will the museum earn if it charges all customers $8 for admission?

Accepted Answer

A)  $200 
B)  $400 
C)  $800 
D)  $2,400 
A)  $200 
B)  $400 
C)  $800 
D)  $2,400

Question 14

Figure 15-23  
-Refer to Figure 15-23. If the firm profit-maximizes, what price will it charge?

Accepted Answer

The answer of Figure 15-23  
-Refer to Figure 15-23....

Question 15

Which of the following is a characteristic of a natural monopoly?

Accepted Answer

A)  Average cost exceeds marginal cost over large regions of output. 
B)  Increasing the number of firms increases each firm's average total cost. 
C)  One firm can supply output at a lower cost than two firms. 
D)  All of the above are correct. 
A)  Average cost exceeds marginal cost over large regions of output. 
B)  Increasing the number of firms increases each firm's average total cost. 
C)  One firm can supply output at a lower cost than two firms. 
D)  All of the above are correct.

Question 16

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.
  
-Refer to Table 15-7. What is the marginal cost of the 8th pair of shoes?

Accepted Answer

A)  $50 
B)  $60 
C)  $90 
D)  $110 
A)  $50 
B)  $60 
C)  $90 
D)  $110

Question 17

A benefit of a monopoly is

Accepted Answer

A)  efficient production. 
B)  decreasing long-run marginal costs. 
C)  profit that can be invested in research and development. 
D)  All of the above are correct. 
A)  efficient production. 
B)  decreasing long-run marginal costs. 
C)  profit that can be invested in research and development. 
D)  All of the above are correct.

Question 18

Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is
able to engage in perfect price discrimination.
  
-Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 8th tie?

Accepted Answer

A)  $45 
B)  $60 
C)  $80 
D)  $95 
A)  $45 
B)  $60 
C)  $80 
D)  $95

Question 19

Figure 15-4  
-Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Accepted Answer

A)  P5. 
B)  P4. 
C)  P3. 
D)  P1. 
A)  P5. 
B)  P4. 
C)  P3. 
D)  P1.

Question 20

Table 15-1
  
-Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Accepted Answer

A)  $3 
B)  $5 
C)  $11 
D)  $17 
A)  $3 
B)  $5 
C)  $11 
D)  $17

Sizable economic profits can persist over time under monopoly if the monopolist

Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Authors are allowed to be monopolists in the sale of their books in order to

Price discrimination is the business practice of

Additional firms often do not try to compete with a natural monopoly because

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

If the government deems a newly-invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

A monopolist's supply curve is horizontal.

Which of the following is not an example of price discrimination?

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Figure 15-14 -Refer to Figure 15-14. A benevolent social planner would have the monopoly operate at an output level

Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, what price will it charge?

Which of the following is a characteristic of a natural monopoly?

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the marginal cost of the 8th pair of shoes?

A benefit of a monopoly is

Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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Exam 15: Monopoly

Sizable economic profits can persist over time under monopoly if the monopolist

Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Authors are allowed to be monopolists in the sale of their books in order to

Price discrimination is the business practice of

Additional firms often do not try to compete with a natural monopoly because

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

If the government deems a newly-invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

A monopolist's supply curve is horizontal.

Which of the following is not an example of price discrimination?

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Figure 15-14 -Refer to Figure 15-14. A benevolent social planner would have the monopoly operate at an output level

Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, what price will it charge?

Which of the following is a characteristic of a natural monopoly?

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the marginal cost of the 8th pair of shoes?

A benefit of a monopoly is

Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters