Question 1

A firm that is the only seller of a good or service that does not have a close substitute is called

Accepted Answer

A)  a monopoly. 
B)  an oligopolist. 
C)  a market maker. 
D)  a price maker. 
A)  a monopoly. 
B)  an oligopolist. 
C)  a market maker. 
D)  a price maker.

Question 2

A virtuous cycle refers to the development of new products that follows when a monopoly earns economic profits.

Accepted Answer

A) True 
 B)False

Question 3

-Refer to Figure 9-9. What is the economically efficient output level?

Accepted Answer

A)  600 units 
B)  800 units 
C)  940 units 
D)  1160 units 
A)  600 units 
B)  800 units 
C)  940 units 
D)  1160 units

Question 4

-Refer to Figure 9-6. The profit-maximising output and price for the monopolist are

Accepted Answer

A)  output = 62; price = $24. 
B)  output = 62; price = $18. 
C)  output = 83; price = $22. 
D)  output = 104; price = $20.80. 
A)  output = 62; price = $24. 
B)  output = 62; price = $18. 
C)  output = 83; price = $22. 
D)  output = 104; price = $20.80.

Question 5

A monopoly is defined as a firm that has the largest market share in an industry.

Accepted Answer

A) True 
 B)False

Question 6

-Refer to Figure 9-11. What is the amount of consumer surplus if, instead of monopoly, the industry was organised as a perfectly competitive industry?

Accepted Answer

A)  $21 
B)  $124 
C)  $186 
D)  $332 
A)  $21 
B)  $124 
C)  $186 
D)  $332

Question 7

If a monopolist practices perfect price discrimination,

Accepted Answer

A)  the firm will break even in the long run. 
B)  consumer surplus will be equal to the deadweight loss. 
C)  producer surplus will equal consumer surplus. 
D)  consumer surplus will be zero. 
A)  the firm will break even in the long run. 
B)  consumer surplus will be equal to the deadweight loss. 
C)  producer surplus will equal consumer surplus. 
D)  consumer surplus will be zero.

Question 8

If we use a narrow definition of monopoly, then a monopoly is defined as a firm

Accepted Answer

A)  that has been granted special production rights by the government. 
B)  that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products. 
C)  that can ignore the actions of all other firms because it produces a product for which there are no close substitutes. 
D)  that has the largest market share in an industry. 
A)  that has been granted special production rights by the government. 
B)  that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products. 
C)  that can ignore the actions of all other firms because it produces a product for which there are no close substitutes. 
D)  that has the largest market share in an industry.

Question 9

-Refer to Figure 9-4. What is the amount of the monopoly's total revenue?

Accepted Answer

A)  $21 600 
B)  $20 400 
C)  $19 740 
D)  $7800 
A)  $21 600 
B)  $20 400 
C)  $19 740 
D)  $7800

Question 10

A monopolist's profit-maximising price and output correspond to the point on a graph

Accepted Answer

A)  where average total cost is minimised. 
B)  where total costs are the smallest relative to price. 
C)  where marginal revenue equals marginal cost. 
D)  where price is as high as possible. 
A)  where average total cost is minimised. 
B)  where total costs are the smallest relative to price. 
C)  where marginal revenue equals marginal cost. 
D)  where price is as high as possible.

Question 11

A successful strategy of price discrimination requires that a firm be a price-taker.

Accepted Answer

A) True 
 B)False

Question 12

-Refer to Figure 9-6. The monopolist earns a profit of

Accepted Answer

A)  $0. 
B)  $170. 
C)  $248. 
D)  $372. 
A)  $0. 
B)  $170. 
C)  $248. 
D)  $372.

Question 13

a. What is the difference between a horizontal merger and a vertical merger?
b. Give an example of each type of merger.
c. Could a horizontal merger be welfare improving?

Accepted Answer

a. A horizontal merger is a merger betwe

Question 14

-Refer to Table 9-3. If Julie charges $10 per hour, how many hours of pet sitting services will be purchased and by whom?

Accepted Answer

A)  2 hours (1 hour by Cara and 1 hour by Dawn) 
B)  1 hour by Cara only 
C)  1 hour by Dawn only 
D)  3 hours (1 hour each by Arun, Bernice and Cara) 
A)  2 hours (1 hour by Cara and 1 hour by Dawn) 
B)  1 hour by Cara only 
C)  1 hour by Dawn only 
D)  3 hours (1 hour each by Arun, Bernice and Cara)

Question 15

-Refer to Figure 9-2. If the firm's average total cost curve is ATC2, the firm will

Accepted Answer

A)  suffer a loss. 
B)  break even. 
C)  make a profit. 
D)  face competition. 
A)  suffer a loss. 
B)  break even. 
C)  make a profit. 
D)  face competition.

Question 16

Identify four reasons for high entry barriers. Briefly explain each reason.

Accepted Answer

Answer:Answer:may ha

Question 17

A firm that engages in price discrimination must be able to identify the preferences of every customer it serves.

Accepted Answer

A) True 
 B)False

Question 18

'Being the only seller in the market, the monopolist can choose any price and quantity it desires.' Evaluate this statement: Is it true or false? Explain your answer.

Accepted Answer

The statement is false. The monopolist c

Question 19

-Refer to Figure 9-8. Use the figure above to answer the following questions.
a. Identify the curves labeled A and B. Identify the curve which contains both point Y and point Z. Identify the curve which contains both point V and point W.
b. What is the profit-maximising quantity and what price will the monopolist charge?
c. What area represents total revenue at the profit-maximising output level?
d. What area represents total cost at the profit-maximising output level?
e. What area represents profit?
f. What is the profit per unit (average profit) at the profit-maximising output level?
g. If this industry was organised as a perfectly competitive industry, what would be the profit-maximising price and quantity?
h. What area represents the deadweight loss as a result of a monopoly?

Accepted Answer

a. A = Demand curve; B = Marginal revenu

Question 20

A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117.

Accepted Answer

A) True 
 B)False

A firm that is the only seller of a good or service that does not have a close substitute is called

A virtuous cycle refers to the development of new products that follows when a monopoly earns economic profits.

-Refer to Figure 9-9. What is the economically efficient output level?

-Refer to Figure 9-6. The profit-maximising output and price for the monopolist are

A monopoly is defined as a firm that has the largest market share in an industry.

-Refer to Figure 9-11. What is the amount of consumer surplus if, instead of monopoly, the industry was organised as a perfectly competitive industry?

If a monopolist practices perfect price discrimination,

If we use a narrow definition of monopoly, then a monopoly is defined as a firm

-Refer to Figure 9-4. What is the amount of the monopoly's total revenue?

A monopolist's profit-maximising price and output correspond to the point on a graph

A successful strategy of price discrimination requires that a firm be a price-taker.

-Refer to Figure 9-6. The monopolist earns a profit of

a. What is the difference between a horizontal merger and a vertical merger? b. Give an example of each type of merger. c. Could a horizontal merger be welfare improving?

-Refer to Table 9-3. If Julie charges $10 per hour, how many hours of pet sitting services will be purchased and by whom?

-Refer to Figure 9-2. If the firm's average total cost curve is ATC₂, the firm will

Identify four reasons for high entry barriers. Briefly explain each reason.

A firm that engages in price discrimination must be able to identify the preferences of every customer it serves.

'Being the only seller in the market, the monopolist can choose any price and quantity it desires.' Evaluate this statement: Is it true or false? Explain your answer.

A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117.

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

Exam 9: Monopoly Markets

A firm that is the only seller of a good or service that does not have a close substitute is called

A virtuous cycle refers to the development of new products that follows when a monopoly earns economic profits.

-Refer to Figure 9-9. What is the economically efficient output level?

-Refer to Figure 9-6. The profit-maximising output and price for the monopolist are

A monopoly is defined as a firm that has the largest market share in an industry.

-Refer to Figure 9-11. What is the amount of consumer surplus if, instead of monopoly, the industry was organised as a perfectly competitive industry?

If a monopolist practices perfect price discrimination,

If we use a narrow definition of monopoly, then a monopoly is defined as a firm

-Refer to Figure 9-4. What is the amount of the monopoly's total revenue?

A monopolist's profit-maximising price and output correspond to the point on a graph

A successful strategy of price discrimination requires that a firm be a price-taker.

-Refer to Figure 9-6. The monopolist earns a profit of

a. What is the difference between a horizontal merger and a vertical merger? b. Give an example of each type of merger. c. Could a horizontal merger be welfare improving?

-Refer to Table 9-3. If Julie charges $10 per hour, how many hours of pet sitting services will be purchased and by whom?

-Refer to Figure 9-2. If the firm's average total cost curve is ATC2, the firm will

Identify four reasons for high entry barriers. Briefly explain each reason.

A firm that engages in price discrimination must be able to identify the preferences of every customer it serves.

'Being the only seller in the market, the monopolist can choose any price and quantity it desires.' Evaluate this statement: Is it true or false? Explain your answer.

A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117.

Economics Foundations and Models

Choices and Trade - Offs in the Market

Where Prices Come Frome : The Interaction of Demand and Supply

Elasticity: The Responsiveness of Demand and Supply

Economic Efficiency , Government Price Setting and Taxes

Concumer Choice and Behavioural Economics

Technology , Production and Costs

Firms in Perfectly Compitive Markets

Monopolistic Competition : The Competitive Model in More Realistic Setting

Oligopoly : Firms in Less Competitve Markets

The Market for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities , Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters

-Refer to Figure 9-2. If the firm's average total cost curve is ATC₂, the firm will