Question 1

Economies of scale, location, and ownership of a raw material are all barriers to entry that can contribute to the emergence of a monopoly.

Accepted Answer

A) True 
 B)False

Question 2

The monopoly firm's profit-maximizing price is:

Accepted Answer

A)  given by the point on the ATC curve for the profit-maximizing quantity. 
B)  given by the point on the demand curve for the profit-maximizing quantity. 
C)  determined for the quantity of output where MR > MC by the greatest amount. 
D)  described by B and C. 
A)  given by the point on the ATC curve for the profit-maximizing quantity. 
B)  given by the point on the demand curve for the profit-maximizing quantity. 
C)  determined for the quantity of output where MR > MC by the greatest amount. 
D)  described by B and C.

Question 3

A firm that faces a downward-sloping demand curve is a:

Accepted Answer

A)  price setter. 
B)  quantity minimizer. 
C)  quantity taker. 
D)  price taker. 
A)  price setter. 
B)  quantity minimizer. 
C)  quantity taker. 
D)  price taker.

Question 4

If a monopolist is producing a quantity that generates MC = P, then profit:

Accepted Answer

A)  is maximized. 
B)  is maximized only if MR = P. 
C)  can be increased by increasing production. 
D)  can be increased by decreasing production. 
A)  is maximized. 
B)  is maximized only if MR = P. 
C)  can be increased by increasing production. 
D)  can be increased by decreasing production.

Question 5

A government-restrictions monopoly is most likely to result if a single firm:

Accepted Answer

A)  is the only seller in a small town or community. 
B)  is investor-owned, but granted the exclusive right by the government to operate in a market. 
C)  experiences long-run increasing economies of scale over a wide range of output. 
D)  has gained control over a strategic input of an important production process. 
A)  is the only seller in a small town or community. 
B)  is investor-owned, but granted the exclusive right by the government to operate in a market. 
C)  experiences long-run increasing economies of scale over a wide range of output. 
D)  has gained control over a strategic input of an important production process.

Question 6

Monopoly is not only inefficient, but it also tends to create equity problems.

Accepted Answer

A) True 
 B)False

Question 7

An increase in the marginal costs of a monopoly would _______ price and _______ quantity.

Accepted Answer

A)  not change; not change 
B)  increase; decrease 
C)  increase; increase 
D)  decrease; increase 
A)  not change; not change 
B)  increase; decrease 
C)  increase; increase 
D)  decrease; increase

Question 8

Profit maximization for a monopoly firm is where P = MC.

Accepted Answer

A) True 
 B)False

Question 9

In the Case in Point on the Ambassador Bridge, the owner has _____ fares presumably because the demand for use of this bridge is _____.

Accepted Answer

A)  increased; elastic 
B)  increased; inelastic 
C)  decreased; elastic 
D)  decreased; inelastic 
A)  increased; elastic 
B)  increased; inelastic 
C)  decreased; elastic 
D)  decreased; inelastic

Question 10

An increase in the demand facing a monopolist will decrease price and increase quantity.

Accepted Answer

A) True 
 B)False

Question 11

If a monopoly firm produces where P = MC, it could _______ profits by producing _______ and _______ its price.

Accepted Answer

A)  increase; less; raising 
B)  decrease; less; lowering 
C)  decrease; less; raising 
D)  A and B are true. 
A)  increase; less; raising 
B)  decrease; less; lowering 
C)  decrease; less; raising 
D)  A and B are true.

Question 12

Use the following to answer question(s): Short-Run Monopoly
  
-(Exhibit: Short-Run Monopoly) The profit-maximizing price is price:

Accepted Answer

A)  N. 
B)  O. 
C)  P. 
D)  Q. 
A)  N. 
B)  O. 
C)  P. 
D)  Q.

Question 13

The Case in Point on the Ambassador Bridge suggests that the source of monopoly power in this case is:

Accepted Answer

A)  location. 
B)  substantial sunk costs. 
C)  government licensing 
D)  both A and B above. 
A)  location. 
B)  substantial sunk costs. 
C)  government licensing 
D)  both A and B above.

Question 14

Use the following to answer question(s): Demand, Elasticity, and Total Revenue
  
-(Exhibit: Demand, Elasticity, and Total Revenue) As price is reduced from point F to P in Panel (a), total revenue will:

Accepted Answer

A)  decrease. 
B)  increase. 
C)  stay the same. 
D)  at first increase and then decrease. 
A)  decrease. 
B)  increase. 
C)  stay the same. 
D)  at first increase and then decrease.

Question 15

The two theoretical extremes of the market structure spectrum are occupied on one end by monopoly and on the other end by:

Accepted Answer

A)  duopoly. 
B)  oligopoly. 
C)  perfect competition. 
D)  monopolistic competition. 
A)  duopoly. 
B)  oligopoly. 
C)  perfect competition. 
D)  monopolistic competition.

Question 16

An increase in the fixed costs of a monopoly firm would _______ price and _______ quantity in the short run.

Accepted Answer

A)  increase; decrease 
B)  increase; increase 
C)  not change; not change 
D)  do none of the above 
A)  increase; decrease 
B)  increase; increase 
C)  not change; not change 
D)  do none of the above

Question 17

A newspaper article stated that a monopoly will charge the highest price that the market will bear? Do you agree? Why or why not?

Accepted Answer

I disagree with the statement that a mon

Question 18

Conditions that prevent the entry of new firms in a monopoly market are:

Accepted Answer

A)  barriers to entry. 
B)  terms of sale. 
C)  labor market stipulations. 
D)  production controls. 
A)  barriers to entry. 
B)  terms of sale. 
C)  labor market stipulations. 
D)  production controls.

Question 19

Which of the following is (are) true?

Accepted Answer

A)  Profit-maximizing behavior is based on the marginal decision rule. 
B)  Additional units of a good should be produced as long as MR > MC. 
C)  The profit-maximizing solution occurs where MR = MC. 
D)  All of the above are true. 
A)  Profit-maximizing behavior is based on the marginal decision rule. 
B)  Additional units of a good should be produced as long as MR > MC. 
C)  The profit-maximizing solution occurs where MR = MC. 
D)  All of the above are true.

Question 20

An industry that contains a firm that is the only producer of a good or service for which there are no close substitutes and for which entry by potential rivals is prohibitively difficult is:

Accepted Answer

A)  a duopoly. 
B)  a monopoly. 
C)  an oligopoly. 
D)  perfect competition. 
A)  a duopoly. 
B)  a monopoly. 
C)  an oligopoly. 
D)  perfect competition.

Economies of scale, location, and ownership of a raw material are all barriers to entry that can contribute to the emergence of a monopoly.

The monopoly firm's profit-maximizing price is:

A firm that faces a downward-sloping demand curve is a:

If a monopolist is producing a quantity that generates MC = P, then profit:

A government-restrictions monopoly is most likely to result if a single firm:

Monopoly is not only inefficient, but it also tends to create equity problems.

An increase in the marginal costs of a monopoly would _ price and _ quantity.

Profit maximization for a monopoly firm is where P = MC.

In the Case in Point on the Ambassador Bridge, the owner has _ fares presumably because the demand for use of this bridge is _.

An increase in the demand facing a monopolist will decrease price and increase quantity.

If a monopoly firm produces where P = MC, it could ___ profits by producing _ and _____ its price.

Use the following to answer question(s): Short-Run Monopoly -(Exhibit: Short-Run Monopoly) The profit-maximizing price is price:

The Case in Point on the Ambassador Bridge suggests that the source of monopoly power in this case is:

Use the following to answer question(s): Demand, Elasticity, and Total Revenue -(Exhibit: Demand, Elasticity, and Total Revenue) As price is reduced from point F to P in Panel (a), total revenue will:

The two theoretical extremes of the market structure spectrum are occupied on one end by monopoly and on the other end by:

An increase in the fixed costs of a monopoly firm would _ price and _ quantity in the short run.

A newspaper article stated that a monopoly will charge the highest price that the market will bear? Do you agree? Why or why not?

Conditions that prevent the entry of new firms in a monopoly market are:

Which of the following is (are) true?

An industry that contains a firm that is the only producer of a good or service for which there are no close substitutes and for which entry by potential rivals is prohibitively difficult is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

Exam 10: Monopoly

Economies of scale, location, and ownership of a raw material are all barriers to entry that can contribute to the emergence of a monopoly.

The monopoly firm's profit-maximizing price is:

A firm that faces a downward-sloping demand curve is a:

If a monopolist is producing a quantity that generates MC = P, then profit:

A government-restrictions monopoly is most likely to result if a single firm:

Monopoly is not only inefficient, but it also tends to create equity problems.

An increase in the marginal costs of a monopoly would _______ price and _______ quantity.

Profit maximization for a monopoly firm is where P = MC.

In the Case in Point on the Ambassador Bridge, the owner has _____ fares presumably because the demand for use of this bridge is _____.

An increase in the demand facing a monopolist will decrease price and increase quantity.

If a monopoly firm produces where P = MC, it could _______ profits by producing _______ and _______ its price.

Use the following to answer question(s): Short-Run Monopoly -(Exhibit: Short-Run Monopoly) The profit-maximizing price is price:

The Case in Point on the Ambassador Bridge suggests that the source of monopoly power in this case is:

Use the following to answer question(s): Demand, Elasticity, and Total Revenue -(Exhibit: Demand, Elasticity, and Total Revenue) As price is reduced from point F to P in Panel (a), total revenue will:

The two theoretical extremes of the market structure spectrum are occupied on one end by monopoly and on the other end by:

An increase in the fixed costs of a monopoly firm would _______ price and _______ quantity in the short run.

A newspaper article stated that a monopoly will charge the highest price that the market will bear? Do you agree? Why or why not?

Conditions that prevent the entry of new firms in a monopoly market are:

Which of the following is (are) true?

An industry that contains a firm that is the only producer of a good or service for which there are no close substitutes and for which entry by potential rivals is prohibitively difficult is:

Economics: The Study of Choice

Confronting Scarcity: Choices in Production

Demand and Supply

Applications of Supply and Demand

Elasticity: a Measure of Response

Markets, Maximizers, and Efficiency

The Analysis of Consumer Choice

Production and Cost

Competitive Markets for Goods and Services

The World of Imperfect Competition

Wages and Employment in Perfect Competition

Interest Rates and the Markets for Capital and Natural Resources

Imperfectly Competitive Markets for Factors of Production

Public Finance and Public Choice

Antitrust Policy and Business Regulation

International Trade

The Economics of the Environment

Inequality, Poverty, and Discrimination

Filters

An increase in the marginal costs of a monopoly would _ price and _ quantity.

In the Case in Point on the Ambassador Bridge, the owner has _ fares presumably because the demand for use of this bridge is _.

If a monopoly firm produces where P = MC, it could ___ profits by producing _ and _____ its price.

An increase in the fixed costs of a monopoly firm would _ price and _ quantity in the short run.