Question 1

A nondiscriminating profit-maximizing monopolist:

Accepted Answer

A)  will never produce in the output range where marginal revenue is positive. 
B)  will never produce in the output range where demand is inelastic. 
C)  will never produce in the output range where demand is elastic. 
D)  may produce where demand is either elastic or inelastic,depending on the level of production costs. 
A)  will never produce in the output range where marginal revenue is positive. 
B)  will never produce in the output range where demand is inelastic. 
C)  will never produce in the output range where demand is elastic. 
D)  may produce where demand is either elastic or inelastic,depending on the level of production costs.

Question 2

If a pure monopolist can price discriminate by separating buyers into two or more groups:

Accepted Answer

A)  the marginal revenue curve and the total revenue curve will now coincide. 
B)  the marginal revenue curve will now shift to a position above the demand curve. 
C)  the firm will face multiple marginal revenue curves. 
D)  marginal revenue will become less at each level of output than it would be without price discrimination. 
A)  the marginal revenue curve and the total revenue curve will now coincide. 
B)  the marginal revenue curve will now shift to a position above the demand curve. 
C)  the firm will face multiple marginal revenue curves. 
D)  marginal revenue will become less at each level of output than it would be without price discrimination.

Question 3

If a pure monopolist is producing more output than the MR = MC output:

Accepted Answer

A)  the firm may,or may not,be maximizing profits. 
B)  it will be in the interest of the firm,but not necessarily of society,to reduce output. 
C)  it will be in the interest of the firm and society to increase output. 
D)  it will be in the interest of the firm and society to reduce output. 
A)  the firm may,or may not,be maximizing profits. 
B)  it will be in the interest of the firm,but not necessarily of society,to reduce output. 
C)  it will be in the interest of the firm and society to increase output. 
D)  it will be in the interest of the firm and society to reduce output.

Question 4

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

Accepted Answer

A) True 
 B)False

Question 5

If a monopolist were to produce in the inelastic segment of its demand curve:

Accepted Answer

A)  total revenue would be at a maximum. 
B)  marginal revenue would be positive. 
C)  the firm would not be maximizing profits. 
D)  it would necessarily incur a loss. 
A)  total revenue would be at a maximum. 
B)  marginal revenue would be positive. 
C)  the firm would not be maximizing profits. 
D)  it would necessarily incur a loss.

Question 6

Price discrimination is:

Accepted Answer

A)  always legal. 
B)  always illegal. 
C)  only illegal if it hurts consumers more than nondiscrimination. 
D)  only illegal if used to lessen or eliminate competition. 
A)  always legal. 
B)  always illegal. 
C)  only illegal if it hurts consumers more than nondiscrimination. 
D)  only illegal if used to lessen or eliminate competition.

Question 7

The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

Accepted Answer

A)  the quantity demanded. 
B)  product price and marginal revenue. 
C)  total revenue. 
D)  product price and average revenue. 
A)  the quantity demanded. 
B)  product price and marginal revenue. 
C)  total revenue. 
D)  product price and average revenue.

Question 8

If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.

Accepted Answer

A) True 
 B)False

Question 9

Pure monopolists always earn economic profits.

Accepted Answer

A) True 
 B)False

Question 10

Answer the question on the basis of the following information for a pure monopolist: $\begin{array}{ccc}
\begin{array}{ccc}
\
\text { Output } & & \text { Total Cost } \
\hline
0 & & \$ 250 \
1 & & 260 \
2 & & 290 \
3 & & 350 \
4 & & 480 \
5 & & 700
\end{array}
\begin{array}{l}
\text { Product }\
\begin{array}{c}
\text { Price } \
\hline \$ 500 \
300 \
250 \
200 \
150 \
100
\end{array}
\end{array}
\end{array}$ How many units would the given profit-maximizing nondiscriminating monopolist produce?

Accepted Answer

A)  1. 
B)  2. 
C)  3. 
D)  4. 
A)  1. 
B)  2. 
C)  3. 
D)  4.

Question 11

In the short run a pure monopolist will charge the highest price the market will bear for its product.

Accepted Answer

A) True 
 B)False

Question 12

(Last Word)The U.S.Internet search market:

Accepted Answer

A)  is best characterized by pure competition. 
B)  is dominated by Google,which controls about 70 percent of the market. 
C)  has a few prominent firms that each possesses a relatively equal market share. 
D)  has no barriers to entry. 
A)  is best characterized by pure competition. 
B)  is dominated by Google,which controls about 70 percent of the market. 
C)  has a few prominent firms that each possesses a relatively equal market share. 
D)  has no barriers to entry.

Question 13

Answer the question on the basis of the following information for a pure monopolist: $\begin{array}{ccc}
\begin{array}{ccc}
\
\text { Output } & & \text { Total Cost } \
\hline
0 & & \$ 250 \
1 & & 260 \
2 & & 290 \
3 & & 350 \
4 & & 480 \
5 & & 700
\end{array}
\begin{array}{l}
\text { Product }\
\begin{array}{c}
\text { Price } \
\hline \$ 500 \
300 \
250 \
200 \
150 \
100
\end{array}
\end{array}
\end{array}$ At its profit-maximizing output,the given nondiscriminating monopolist:

Accepted Answer

A)  incurs a loss. 
B)  earns an economic profit of $250. 
C)  earns a normal profit of $250. 
D)  earns an economic profit of $150. 
A)  incurs a loss. 
B)  earns an economic profit of $250. 
C)  earns a normal profit of $250. 
D)  earns an economic profit of $150.

Question 14

Which of the following is not a possible source of natural monopoly?

Accepted Answer

A)  Large-scale network effects. 
B)  Simultaneous consumption. 
C)  Greater use of specialized inputs. 
D)  Rent-seeking behavior. 
A)  Large-scale network effects. 
B)  Simultaneous consumption. 
C)  Greater use of specialized inputs. 
D)  Rent-seeking behavior.

Question 15

Price discrimination is illegal in the United States under antitrust regulations.

Accepted Answer

A) True 
 B)False

Question 16

Price discrimination refers to:

Accepted Answer

A)  selling a given product for different prices at two different points in time. 
B)  any price above that which is equal to a minimum average total cost. 
C)  the selling of a given product at different prices to different customers that do not reflect cost differences. 
D)  the difference between the prices a purely competitive seller and a purely monopolistic seller would charge. 
A)  selling a given product for different prices at two different points in time. 
B)  any price above that which is equal to a minimum average total cost. 
C)  the selling of a given product at different prices to different customers that do not reflect cost differences. 
D)  the difference between the prices a purely competitive seller and a purely monopolistic seller would charge.

Question 17

Which of the following is incorrect? Imperfectly competitive producers:

Accepted Answer

A)  face downsloping demand curves. 
B)  do not compete with one another. 
C)  can alter their output by changing price. 
D)  find that,when they reduce price,their total revenue increases by less than the new price. 
A)  face downsloping demand curves. 
B)  do not compete with one another. 
C)  can alter their output by changing price. 
D)  find that,when they reduce price,their total revenue increases by less than the new price.

Question 18

The pure monopolist's demand curve is relatively elastic:

Accepted Answer

A)  in the price range where total revenue is declining. 
B)  at all points where the demand curve lies above the horizontal axis. 
C)  in the price range where marginal revenue is negative. 
D)  in the price range where marginal revenue is positive. 
A)  in the price range where total revenue is declining. 
B)  at all points where the demand curve lies above the horizontal axis. 
C)  in the price range where marginal revenue is negative. 
D)  in the price range where marginal revenue is positive.

Question 19

In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum.

Accepted Answer

A) True 
 B)False

A nondiscriminating profit-maximizing monopolist:

If a pure monopolist can price discriminate by separating buyers into two or more groups:

If a pure monopolist is producing more output than the MR = MC output:

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

If a monopolist were to produce in the inelastic segment of its demand curve:

Price discrimination is:

The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.

Pure monopolists always earn economic profits.

Answer the question on the basis of the following information for a pure monopolist: Output Total Cost 0 \ 250 1 260 2 290 3 350 4 480 5 700 Product Price \ 500 300 250 200 150 100 How many units would the given profit-maximizing nondiscriminating monopolist produce?

In the short run a pure monopolist will charge the highest price the market will bear for its product.

(Last Word)The U.S.Internet search market:

Answer the question on the basis of the following information for a pure monopolist: Output Total Cost 0 \ 250 1 260 2 290 3 350 4 480 5 700 Product Price \ 500 300 250 200 150 100 At its profit-maximizing output,the given nondiscriminating monopolist:

Which of the following is not a possible source of natural monopoly?

Price discrimination is illegal in the United States under antitrust regulations.

Price discrimination refers to:

Which of the following is incorrect? Imperfectly competitive producers:

The pure monopolist's demand curve is relatively elastic:

In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters

Exam 12: Pure Monopoly

A nondiscriminating profit-maximizing monopolist:

If a pure monopolist can price discriminate by separating buyers into two or more groups:

If a pure monopolist is producing more output than the MR = MC output:

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

If a monopolist were to produce in the inelastic segment of its demand curve:

Price discrimination is:

The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.

Pure monopolists always earn economic profits.

Answer the question on the basis of the following information for a pure monopolist: Output Total Cost 0 \ 250 1 260 2 290 3 350 4 480 5 700 Product Price \ 500 300 250 200 150 100 How many units would the given profit-maximizing nondiscriminating monopolist produce?

In the short run a pure monopolist will charge the highest price the market will bear for its product.

(Last Word)The U.S.Internet search market:

Answer the question on the basis of the following information for a pure monopolist: Output Total Cost 0 \ 250 1 260 2 290 3 350 4 480 5 700 Product Price \ 500 300 250 200 150 100 At its profit-maximizing output,the given nondiscriminating monopolist:

Which of the following is not a possible source of natural monopoly?

Price discrimination is illegal in the United States under antitrust regulations.

Price discrimination refers to:

Which of the following is incorrect? Imperfectly competitive producers:

The pure monopolist's demand curve is relatively elastic:

In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Cost of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Monopolistic Competition and Oligopoly

Technology RD and Efficiency

The Demand for Resources

Wage Determination

Rent Interest and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Filters