Question 1

Which of the following is not a characteristic of a monopoly?

Accepted Answer

A)  High barriers to entry 
B)  Differentiated product 
C)  Ownership of essential resources 
D)  Large economics of scale 
A)  High barriers to entry 
B)  Differentiated product 
C)  Ownership of essential resources 
D)  Large economics of scale

Question 2

Figure 7.3:  
-In Figure 7.3,the profit-maximizing level of output for a monopolist is:

Accepted Answer

A)  3 units. 
B)  4 units. 
C)  5 units. 
D)  6 units. 
A)  3 units. 
B)  4 units. 
C)  5 units. 
D)  6 units.

Question 3

In comparison to a competitive industry how is a monopoly different?

Accepted Answer

A)  High prices and profits signal consumers' demand for more output. 
B)  Firms try to operate where marginal cost equals marginal revenue. 
C)  The product is standardized or unique. 
D)  During price adjustments price equals marginal cost throughout the process. 
A)  High prices and profits signal consumers' demand for more output. 
B)  Firms try to operate where marginal cost equals marginal revenue. 
C)  The product is standardized or unique. 
D)  During price adjustments price equals marginal cost throughout the process.

Question 4

For a monopoly a firms' marginal revenue is always equal to price.

Accepted Answer

A) True 
 B)False

Question 5

The demand curve for a monopolist:

Accepted Answer

A)  Is steeper than the marginal revenue curve. 
B)  Lies below the marginal revenue curve at every point but the first. 
C)  Is the same as the marginal revenue curve. 
D)  Lies above the marginal revenue curve at every point but the first. 
A)  Is steeper than the marginal revenue curve. 
B)  Lies below the marginal revenue curve at every point but the first. 
C)  Is the same as the marginal revenue curve. 
D)  Lies above the marginal revenue curve at every point but the first.

Question 6

Which of the following is similar for both a competitive industry and a monopoly?

Accepted Answer

A)  The level of economic profits in the long run. 
B)  Continuous pressure to improve product quality. 
C)  Profits signal consumers' demand for more output. 
D)  In the long run,average total costs are minimized. 
A)  The level of economic profits in the long run. 
B)  Continuous pressure to improve product quality. 
C)  Profits signal consumers' demand for more output. 
D)  In the long run,average total costs are minimized.

Question 7

Firms that have significant market power tend to:

Accepted Answer

A)  Produce at minimum average total costs. 
B)  Pursue cost reductions. 
C)  Pursue product improvements. 
D)  Inhibit economic growth. 
A)  Produce at minimum average total costs. 
B)  Pursue cost reductions. 
C)  Pursue product improvements. 
D)  Inhibit economic growth.

Question 8

Barriers to entry are obstacles that make it difficult or impossible for additional producers to enter a market.

Accepted Answer

A) True 
 B)False

Question 9

List and explain some of the benefits of a monopoly? Will a monopolist always charge the highest possible price?

Accepted Answer

a)Some of the benefits of a monopoly inc

Question 10

The following table shows some costs and prices faced by a company that produces submarines.
Table 7.3  
-In Table 7.3,a profit-maximizing monopolist will produce where:

Accepted Answer

A)  Marginal cost equals marginal revenue. 
B)  Price equals marginal cost. 
C)  Total cost is minimized. 
D)  Total revenue is maximized. 
A)  Marginal cost equals marginal revenue. 
B)  Price equals marginal cost. 
C)  Total cost is minimized. 
D)  Total revenue is maximized.

Question 11

The market structure of the U.S.fast food industry is most likely:

Accepted Answer

A)  Perfectly competitive. 
B)  A monopoly. 
C)  Monopolistically competitive. 
D)  An oligopoly. 
A)  Perfectly competitive. 
B)  A monopoly. 
C)  Monopolistically competitive. 
D)  An oligopoly.

Question 12

In order to survive the competition,monopolies must engage in research and design activity.

Accepted Answer

A) True 
 B)False

Question 13

A monopoly realizes larger profits than a comparable competitive market by charging a _______ price and producing _______ output.

Accepted Answer

A)  Higher;the same level of 
B)  Higher;more 
C)  Lower;more 
D)  Higher;less 
A)  Higher;the same level of 
B)  Higher;more 
C)  Lower;more 
D)  Higher;less

Question 14

For a monopolist,after the first unit of output,marginal revenue is always:

Accepted Answer

A)  Constant. 
B)  Increasing. 
C)  Less than price. 
D)  Greater than marginal cost. 
A)  Constant. 
B)  Increasing. 
C)  Less than price. 
D)  Greater than marginal cost.

Question 15

Figure 7.3:  
-In Figure 7.3,the price charged by a profit-maximizing monopolist is:

Accepted Answer

A)  $6. 
B)  $7. 
C)  $8. 
D)  $9. 
A)  $6. 
B)  $7. 
C)  $8. 
D)  $9.

Question 16

A monopolist produces more output at a lower price than a competitive market would,ceteris paribus.

Accepted Answer

A) True 
 B)False

Question 17

A contestable market is:

Accepted Answer

A)  A perfectly competitive market. 
B)  An imperfectly competitive situation with high barriers to entry. 
C)  An imperfectly competitive situation that is subject to entry. 
D)  A market with only one producer. 
A)  A perfectly competitive market. 
B)  An imperfectly competitive situation with high barriers to entry. 
C)  An imperfectly competitive situation that is subject to entry. 
D)  A market with only one producer.

Question 18

Compared to a competitive market with the same long-run costs and market demand,a monopolist has:

Accepted Answer

A)  Less pressure to reduce costs and less incentive to improve quality. 
B)  Less pressure to reduce costs and more incentive to improve quality. 
C)  More pressure to reduce costs and less incentive to improve quality. 
D)  More pressure to reduce costs and more incentive to improve quality. 
A)  Less pressure to reduce costs and less incentive to improve quality. 
B)  Less pressure to reduce costs and more incentive to improve quality. 
C)  More pressure to reduce costs and less incentive to improve quality. 
D)  More pressure to reduce costs and more incentive to improve quality.

Question 19

Figure 7.2:  
-In Figure 7.2,if this industry is competitive,the profit-maximizing price is:

Accepted Answer

A)  $9. 
B)  $11. 
C)  Between $9 and $10. 
D)  Between $10 and $11. 
A)  $9. 
B)  $11. 
C)  Between $9 and $10. 
D)  Between $10 and $11.

Question 20

For both perfectly competitive and monopoly firms,price will exceed marginal cost at the profit-maximizing output.

Accepted Answer

A) True 
 B)False

Which of the following is not a characteristic of a monopoly?

Figure 7.3: -In Figure 7.3,the profit-maximizing level of output for a monopolist is:

In comparison to a competitive industry how is a monopoly different?

For a monopoly a firms' marginal revenue is always equal to price.

The demand curve for a monopolist:

Which of the following is similar for both a competitive industry and a monopoly?

Firms that have significant market power tend to:

Barriers to entry are obstacles that make it difficult or impossible for additional producers to enter a market.

List and explain some of the benefits of a monopoly? Will a monopolist always charge the highest possible price?

The following table shows some costs and prices faced by a company that produces submarines. Table 7.3 -In Table 7.3,a profit-maximizing monopolist will produce where:

The market structure of the U.S.fast food industry is most likely:

In order to survive the competition,monopolies must engage in research and design activity.

A monopoly realizes larger profits than a comparable competitive market by charging a _ price and producing _ output.

For a monopolist,after the first unit of output,marginal revenue is always:

Figure 7.3: -In Figure 7.3,the price charged by a profit-maximizing monopolist is:

A monopolist produces more output at a lower price than a competitive market would,ceteris paribus.

A contestable market is:

Compared to a competitive market with the same long-run costs and market demand,a monopolist has:

Figure 7.2: -In Figure 7.2,if this industry is competitive,the profit-maximizing price is:

For both perfectly competitive and monopoly firms,price will exceed marginal cost at the profit-maximizing output.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

Exam 7: Monopoly

Which of the following is not a characteristic of a monopoly?

Figure 7.3: -In Figure 7.3,the profit-maximizing level of output for a monopolist is:

In comparison to a competitive industry how is a monopoly different?

For a monopoly a firms' marginal revenue is always equal to price.

The demand curve for a monopolist:

Which of the following is similar for both a competitive industry and a monopoly?

Firms that have significant market power tend to:

Barriers to entry are obstacles that make it difficult or impossible for additional producers to enter a market.

List and explain some of the benefits of a monopoly? Will a monopolist always charge the highest possible price?

The following table shows some costs and prices faced by a company that produces submarines. Table 7.3 -In Table 7.3,a profit-maximizing monopolist will produce where:

The market structure of the U.S.fast food industry is most likely:

In order to survive the competition,monopolies must engage in research and design activity.

A monopoly realizes larger profits than a comparable competitive market by charging a _______ price and producing _______ output.

For a monopolist,after the first unit of output,marginal revenue is always:

Figure 7.3: -In Figure 7.3,the price charged by a profit-maximizing monopolist is:

A monopolist produces more output at a lower price than a competitive market would,ceteris paribus.

A contestable market is:

Compared to a competitive market with the same long-run costs and market demand,a monopolist has:

Figure 7.2: -In Figure 7.2,if this industry is competitive,the profit-maximizing price is:

For both perfectly competitive and monopoly firms,price will exceed marginal cost at the profit-maximizing output.

The Challenge of Economics

The US Economy

Supply and Demand

Consumer Demand

Supply Decisions

Competition

The Labor Market

Government Intervention

The Business Cycle

Aggregate Supply and Demand

Fiscal Policy

Money and Banks

Monetary Policy

Economic Growth

Theory and Reality

International Trade

Filters

A monopoly realizes larger profits than a comparable competitive market by charging a _ price and producing _ output.