Question 1

-Refer to the graph above.If the monopoly firm maximizes profit,it will produce:

Accepted Answer

A) 15 units of output and producer surplus will be $28.125. 
B) 15 units of output and producer surplus will be $16.875. 
C) 25 units of output and producer surplus will be $15.625. 
D) 30 units of output and producer surplus will be $60. 
A) 15 units of output and producer surplus will be $28.125. 
B) 15 units of output and producer surplus will be $16.875. 
C) 25 units of output and producer surplus will be $15.625. 
D) 30 units of output and producer surplus will be $60.

Question 2

What will be the effect of a monopoly sales tax imposed on a monopolist's output?

Accepted Answer

A) It will lead to an increase in the price and a reduction in output. 
B) It will lead to an increase in price but will have no effect on output. 
C) It will lead to a reduction in output but will have no effect on price. 
D) It will have no impact on price or on output. 
A) It will lead to an increase in the price and a reduction in output. 
B) It will lead to an increase in price but will have no effect on output. 
C) It will lead to a reduction in output but will have no effect on price. 
D) It will have no impact on price or on output.

Question 3

Suppose a monopolist was charging a price of $70 for its product and was selling 60 units.If it lowers its price to $69,the monopolist sells 61 units.What is the marginal revenue of that product?

Accepted Answer

The answer of Suppose a monopolist was charging a price...

Question 4

All the following,except one,are types of barriers to entry.Which is the exception?

Accepted Answer

A) Social barriers. 
B) Technical barriers. 
C) Economic barriers. 
D) Legal barriers. 
A) Social barriers. 
B) Technical barriers. 
C) Economic barriers. 
D) Legal barriers.

Question 5

All of the following statements,except one,are true about a monopolist.Which is the exception?

Accepted Answer

A) Its demand curve is downward-sloping. 
B) Average revenue and price are the same. 
C) Marginal revenue and price are the same. 
D) Marginal revenue and marginal cost are equal at the profit maximizing output. 
A) Its demand curve is downward-sloping. 
B) Average revenue and price are the same. 
C) Marginal revenue and price are the same. 
D) Marginal revenue and marginal cost are equal at the profit maximizing output.

Question 6

What are barriers to entry?

Accepted Answer

A) Toll highways which make transportation costs very high. 
B) Tariffs imposed on imported goods. 
C) Obstacles that make it difficult for new participants to enter an industry. 
D) Quotas imposed on imported goods. 
A) Toll highways which make transportation costs very high. 
B) Tariffs imposed on imported goods. 
C) Obstacles that make it difficult for new participants to enter an industry. 
D) Quotas imposed on imported goods.

Question 7

If the marginal cost of the 1000th unit produced by a monopolist is $16 and its marginal revenue is $20,what should the monopolist do?

Accepted Answer

A) Produce more until the marginal profit becomes zero. 
B) Produce less since the costs will be less and therefore the profit will be greater. 
C) Produce less since it will be able to sell them at a higher price and therefore obtain greater profits. 
D) Produce more until the marginal revenue becomes zero. 
A) Produce more until the marginal profit becomes zero. 
B) Produce less since the costs will be less and therefore the profit will be greater. 
C) Produce less since it will be able to sell them at a higher price and therefore obtain greater profits. 
D) Produce more until the marginal revenue becomes zero.

Question 8

A monopolist is free to charge any price it wishes for its product.

Accepted Answer

A) True 
 B)False

Question 9

"A monopolist can charge whatever price it wishes because it is the only firm in the market,therefore it will set the highest price it can charge." Evaluate this statement.

Accepted Answer

The monopolist can charge whatever price

Question 10

All of the following except one are examples of price discrimination.Which is the exception?

Accepted Answer

A) An airline charges different prices to different travelers. 
B) A telephone company charges different rates according to the time of use. 
C) A professional gardener is able to buy plants at a lower price than a householder can. 
D) An electricity company charges lower rates during the daytime compared to night time. 
E) A hairdresser charges different rates according to the age of his clients. 
A) An airline charges different prices to different travelers. 
B) A telephone company charges different rates according to the time of use. 
C) A professional gardener is able to buy plants at a lower price than a householder can. 
D) An electricity company charges lower rates during the daytime compared to night time. 
E) A hairdresser charges different rates according to the age of his clients.

Question 11

The following graph shows the market demand and average cost curve for electricity (in millions of kilowatts)in an urban centre:
  
-Refer to the above graph to answer this question.Suppose that the price is $3,and the market is served by a monopolist.What quantity will be sold,and what will be the total profit or loss?

Accepted Answer

A) 75 and $0. 
B) 80 and $40. 
C) 100 and $100. 
D) 110 and $0. 
E) 110 and $27.50. 
A) 75 and $0. 
B) 80 and $40. 
C) 100 and $100. 
D) 110 and $0. 
E) 110 and $27.50.

Question 12

Differentiate between a demand curve for a perfectly competitive firm and that for a monopolist.

Accepted Answer

A demand curve for a perfect c

Question 13

What is meant by the term natural monopoly?

Accepted Answer

A) A single producer in a market,usually supported by government subsidies,who is able to produce at a higher cost than competing firms could. 
B) A single producer in a market,usually with patent rights,who is able to produce at a cost equal to those of the competing firms. 
C) A single producer in a market,usually with large economies of scale,who is able to produce at a lower cost than competing firms could. 
D) A single producer in a market,usually with monopoly rights over input resources,who is able to produce at a higher cost than competing firms could. 
A) A single producer in a market,usually supported by government subsidies,who is able to produce at a higher cost than competing firms could. 
B) A single producer in a market,usually with patent rights,who is able to produce at a cost equal to those of the competing firms. 
C) A single producer in a market,usually with large economies of scale,who is able to produce at a lower cost than competing firms could. 
D) A single producer in a market,usually with monopoly rights over input resources,who is able to produce at a higher cost than competing firms could.

Question 14

Suppose a monopolist can divide its market into two segments and it is able to practice price discrimination.If the two segments do not have the same price elasticity of demand,will the monopolist charge a higher or lower price in the market where the demand is relatively more inelastic?

Accepted Answer

The monopolist will charge a higher pric

Question 15

The following table gives the cost and demand data for a monopolist:
  
-Refer to the above information to answer this question.Suppose that the monopolist is unregulated.What will be the level of maximum profit?

Accepted Answer

A) $0. 
B) $3. 
C) $12. 
D) $15. 
E) $60. 
A) $0. 
B) $3. 
C) $12. 
D) $15. 
E) $60.

Question 16

-Refer to the graph above.Producer surplus that is lost to society as a result of monopoly is:

Accepted Answer

A) $2.5. 
B) $5. 
C) $15.625. 
D) $16.875. 
A) $2.5. 
B) $5. 
C) $15.625. 
D) $16.875.

Question 17

The following table gives the cost and demand data for a monopolist:
  
-Refer to the above information to answer this question.Suppose that the monopolist is regulated and forced to charge a socially optimum price.What will be the price and output?

Accepted Answer

A) $85 and 4. 
B) $80 and 5. 
C) $75 and 6. 
D) $70 and 4. 
E) $65 and 8. 
A) $85 and 4. 
B) $80 and 5. 
C) $75 and 6. 
D) $70 and 4. 
E) $65 and 8.

Question 18

Figure 10.10 depicts the cost and revenue curves for a monopolist.
  
-Refer to Figure 10.10 to answer this question.What are the profit-maximizing level of output and price respectively?

Accepted Answer

A) 30 and $20. 
B) 30 and $35. 
C) 35 and $27.50. 
D) 40 and $30. 
E) 42 and $28. 
A) 30 and $20. 
B) 30 and $35. 
C) 35 and $27.50. 
D) 40 and $30. 
E) 42 and $28.

Question 19

Suppose a monopolist was charging a price of $120 for its product and was selling 80 units.If it lowers its price to $119 and,as a result,sells 81 units what is the marginal revenue for the product?

Accepted Answer

A) 0. 
B) $1. 
C) $39. 
D) $9,639. 
A) 0. 
B) $1. 
C) $39. 
D) $9,639.

Question 20

Table 10.4 outlines the cost and revenue data for a monopolist.
  
-Refer to Table 10.4 to answer this question.What are the profit-maximizing level of output and price respectively?

Accepted Answer

A) 3 and $35. 
B) 4 and $30. 
C) 5 and $25. 
D) 5 and $30. 
E) 6 and $20. 
A) 3 and $35. 
B) 4 and $30. 
C) 5 and $25. 
D) 5 and $30. 
E) 6 and $20.

-Refer to the graph above.If the monopoly firm maximizes profit,it will produce:

What will be the effect of a monopoly sales tax imposed on a monopolist's output?

Suppose a monopolist was charging a price of $70 for its product and was selling 60 units.If it lowers its price to $69,the monopolist sells 61 units.What is the marginal revenue of that product?

All the following,except one,are types of barriers to entry.Which is the exception?

All of the following statements,except one,are true about a monopolist.Which is the exception?

What are barriers to entry?

If the marginal cost of the 1000^th unit produced by a monopolist is $16 and its marginal revenue is $20,what should the monopolist do?

A monopolist is free to charge any price it wishes for its product.

"A monopolist can charge whatever price it wishes because it is the only firm in the market,therefore it will set the highest price it can charge." Evaluate this statement.

All of the following except one are examples of price discrimination.Which is the exception?

Differentiate between a demand curve for a perfectly competitive firm and that for a monopolist.

What is meant by the term natural monopoly?

Suppose a monopolist can divide its market into two segments and it is able to practice price discrimination.If the two segments do not have the same price elasticity of demand,will the monopolist charge a higher or lower price in the market where the demand is relatively more inelastic?

The following table gives the cost and demand data for a monopolist: -Refer to the above information to answer this question.Suppose that the monopolist is unregulated.What will be the level of maximum profit?

-Refer to the graph above.Producer surplus that is lost to society as a result of monopoly is:

The following table gives the cost and demand data for a monopolist: -Refer to the above information to answer this question.Suppose that the monopolist is regulated and forced to charge a socially optimum price.What will be the price and output?

Figure 10.10 depicts the cost and revenue curves for a monopolist. -Refer to Figure 10.10 to answer this question.What are the profit-maximizing level of output and price respectively?

Suppose a monopolist was charging a price of $120 for its product and was selling 80 units.If it lowers its price to $119 and,as a result,sells 81 units what is the marginal revenue for the product?

Table 10.4 outlines the cost and revenue data for a monopolist. -Refer to Table 10.4 to answer this question.What are the profit-maximizing level of output and price respectively?

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 10: Monopoly

-Refer to the graph above.If the monopoly firm maximizes profit,it will produce:

What will be the effect of a monopoly sales tax imposed on a monopolist's output?

Suppose a monopolist was charging a price of $70 for its product and was selling 60 units.If it lowers its price to $69,the monopolist sells 61 units.What is the marginal revenue of that product?

All the following,except one,are types of barriers to entry.Which is the exception?

All of the following statements,except one,are true about a monopolist.Which is the exception?

What are barriers to entry?

If the marginal cost of the 1000th unit produced by a monopolist is $16 and its marginal revenue is $20,what should the monopolist do?

A monopolist is free to charge any price it wishes for its product.

"A monopolist can charge whatever price it wishes because it is the only firm in the market,therefore it will set the highest price it can charge." Evaluate this statement.

All of the following except one are examples of price discrimination.Which is the exception?

Differentiate between a demand curve for a perfectly competitive firm and that for a monopolist.

What is meant by the term natural monopoly?

Suppose a monopolist can divide its market into two segments and it is able to practice price discrimination.If the two segments do not have the same price elasticity of demand,will the monopolist charge a higher or lower price in the market where the demand is relatively more inelastic?

The following table gives the cost and demand data for a monopolist: -Refer to the above information to answer this question.Suppose that the monopolist is unregulated.What will be the level of maximum profit?

-Refer to the graph above.Producer surplus that is lost to society as a result of monopoly is:

The following table gives the cost and demand data for a monopolist: -Refer to the above information to answer this question.Suppose that the monopolist is regulated and forced to charge a socially optimum price.What will be the price and output?

Figure 10.10 depicts the cost and revenue curves for a monopolist. -Refer to Figure 10.10 to answer this question.What are the profit-maximizing level of output and price respectively?

Suppose a monopolist was charging a price of $120 for its product and was selling 80 units.If it lowers its price to $119 and,as a result,sells 81 units what is the marginal revenue for the product?

Table 10.4 outlines the cost and revenue data for a monopolist. -Refer to Table 10.4 to answer this question.What are the profit-maximizing level of output and price respectively?

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

A Firms Production Decisions and Costs in the Short Run

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Imperfect Competition

The Factors of Production

International Trade

Filters

If the marginal cost of the 1000^th unit produced by a monopolist is $16 and its marginal revenue is $20,what should the monopolist do?