Question 1

Given similar market conditions, we would expect a monopolist to:

Accepted Answer

A)  charge a higher price and produce a lower output than under perfect competition. 
B)  charge a lower price and produce a lower output than under perfect competition. 
C)  charge a higher price and produce a higher output than under perfect competition. 
D)  charge the same price and produce the same output as in perfect competition. 
A)  charge a higher price and produce a lower output than under perfect competition. 
B)  charge a lower price and produce a lower output than under perfect competition. 
C)  charge a higher price and produce a higher output than under perfect competition. 
D)  charge the same price and produce the same output as in perfect competition.

Question 2

Electricity and water are usually supplied to households by one supplier because:

Accepted Answer

A)  the government can collect more taxes from a monopoly firm. 
B)  the single supplier can provide electricity and water at lower cost than two or more firms. 
C)  long-run average total cost increases over the entire range of output. 
D)  it is a monopoly protected by the ownership of vital resources. 
A)  the government can collect more taxes from a monopoly firm. 
B)  the single supplier can provide electricity and water at lower cost than two or more firms. 
C)  long-run average total cost increases over the entire range of output. 
D)  it is a monopoly protected by the ownership of vital resources.

Question 3

The demand curve for a monopolist is:

Accepted Answer

A)  the demand curve for the industry. 
B)  less than the market demand curve. 
C)  below the marginal revenue curve. 
D)  non-existent. 
A)  the demand curve for the industry. 
B)  less than the market demand curve. 
C)  below the marginal revenue curve. 
D)  non-existent.

Question 4

Narrbegin Exhibit 8.7   
-According to Exhibit 8.7, if a firm buys all the other firms in this market and becomes a monopolist, we would expect:

Accepted Answer

A)  a more efficient allocation of resources, as P = MC now. 
B)  the price to fall and output to rise to (P1, Q2). 
C)  the price to fall and output to decline to (P0, Q2). 
D)  the price to rise and output to fall to (P0, Q1). 
A)  a more efficient allocation of resources, as P = MC now. 
B)  the price to fall and output to rise to (P1, Q2). 
C)  the price to fall and output to decline to (P0, Q2). 
D)  the price to rise and output to fall to (P0, Q1).

Question 5

Narrbegin Exhibit 8.7   
-According to Exhibit 8.7, if competition was introduced in a monopoly market, we could expect which of the following to occur?

Accepted Answer

A)  Price to fall from P0 to P1 and output to rise from Q1 to Q2. 
B)  Price to fall from P1 to P2 and output to fall from Q2 to Q1. 
C)  Price to fall from P0 to P2 and output to fall from Q2 to Q1. 
D)  Price to rise from P1 to P0 and output to rise from Q1 to Q2. 
A)  Price to fall from P0 to P1 and output to rise from Q1 to Q2. 
B)  Price to fall from P1 to P2 and output to fall from Q2 to Q1. 
C)  Price to fall from P0 to P2 and output to fall from Q2 to Q1. 
D)  Price to rise from P1 to P0 and output to rise from Q1 to Q2.

Question 6

If the monopolist can discriminate between buyers, then it is optimal to charge:

Accepted Answer

A)  a higher price to the buyers with high elasticity of demand, and a lower price to the buyers with low elasticity of demand. 
B)  a lower price to all buyers. 
C)  a higher price to all buyers. 
D)  a lower price to the buyers with high elasticity of demand, and a higher price to the buyers with low elasticity of demand. 
A)  a higher price to the buyers with high elasticity of demand, and a lower price to the buyers with low elasticity of demand. 
B)  a lower price to all buyers. 
C)  a higher price to all buyers. 
D)  a lower price to the buyers with high elasticity of demand, and a higher price to the buyers with low elasticity of demand.

Question 7

Research on the role of monopolies in an economy shows:

Accepted Answer

A)  that monopolies have only negative effects on the economy. 
B)  that monopolies have only positive effects on the economy. 
C)  mixed results. 
D)  that monopolies do not ultimately contribute to technological change. 
A)  that monopolies have only negative effects on the economy. 
B)  that monopolies have only positive effects on the economy. 
C)  mixed results. 
D)  that monopolies do not ultimately contribute to technological change.

Question 8

Monopolists are criticised because they are inefficient. What is meant by this statement?

Accepted Answer

A)  Monopolists charge too high a price. 
B)  Monopolists don't innovate enough to control pollution. 
C)  Monopolists produce a large quantity of waste. 
D)  Monopolists usually don't produce at the minimum of the ATC. 
A)  Monopolists charge too high a price. 
B)  Monopolists don't innovate enough to control pollution. 
C)  Monopolists produce a large quantity of waste. 
D)  Monopolists usually don't produce at the minimum of the ATC.

Question 9

A monopoly market is characterised by many sellers of a product which has few, if any, suitable substitutes.

Accepted Answer

A) True 
 B)False

Question 10

A monopoly can successfully price-discriminate as long as there is no competition.

Accepted Answer

A) True 
 B)False

Question 11

Water is often provided to households by one supplier because:

Accepted Answer

A)  there is not enough competition in the market. 
B)  the single supplier cannot supply the entire market demand at a lower cost than two or more smaller firms could. 
C)  long-run average total cost increases over the entire range of output. 
D)  it is a natural monopoly. 
A)  there is not enough competition in the market. 
B)  the single supplier cannot supply the entire market demand at a lower cost than two or more smaller firms could. 
C)  long-run average total cost increases over the entire range of output. 
D)  it is a natural monopoly.

Question 12

In contrast to a perfectly competitive firm, a monopolist earns:

Accepted Answer

A)  negative economic profit in the long run. 
B)  zero economic profit in the long run. 
C)  positive economic profit in the long run. 
D)  positive economic profit in the short run. 
A)  negative economic profit in the long run. 
B)  zero economic profit in the long run. 
C)  positive economic profit in the long run. 
D)  positive economic profit in the short run.

Question 13

To maximise its profit, a monopoly should choose a price where demand is:

Accepted Answer

A)  unitary elastic. 
B)  inelastic. 
C)  elastic. 
D)  vertical. 
A)  unitary elastic. 
B)  inelastic. 
C)  elastic. 
D)  vertical.

Question 14

A natural monopoly occurs because:

Accepted Answer

A)  of the lack of competition. 
B)  of ownership of vital resources. 
C)  its long-run average cost of production declines throughout the entire range of output. 
D)  of the patent. 
A)  of the lack of competition. 
B)  of ownership of vital resources. 
C)  its long-run average cost of production declines throughout the entire range of output. 
D)  of the patent.

Question 15

A monopoly earns the most profit by charging a price where demand is inelastic.

Accepted Answer

A) True 
 B)False

Question 16

A monopolist earning economic profit in the short run determines that, at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?

Accepted Answer

A)  Raise price or lower output. 
B)  Lower price. 
C)  Raise output. 
D)  Lower price and raise output. 
A)  Raise price or lower output. 
B)  Lower price. 
C)  Raise output. 
D)  Lower price and raise output.

Question 17

When is a monopolist able to charge a lower price than a competitive firm?

Accepted Answer

A)  Never. 
B)  If the monopolist is a natural monopolist. 
C)  If the monopolist is able to price discriminate. 
D)  If the monopolist has enough profit. 
A)  Never. 
B)  If the monopolist is a natural monopolist. 
C)  If the monopolist is able to price discriminate. 
D)  If the monopolist has enough profit.

Question 18

A single-priced monopolist earns an economic profit only when:

Accepted Answer

A)  average total cost equals price. 
B)  marginal cost equals price. 
C)  marginal revenue equals price. 
D)  average total cost is less than price. 
A)  average total cost equals price. 
B)  marginal cost equals price. 
C)  marginal revenue equals price. 
D)  average total cost is less than price.

Question 19

An industry in which total costs are kept to a minimum because only one firm serves the whole market is called a:

Accepted Answer

A)  natural monopoly. 
B)  competitive monopoly. 
C)  patent monopoly. 
D)  limit monopoly. 
A)  natural monopoly. 
B)  competitive monopoly. 
C)  patent monopoly. 
D)  limit monopoly.

Question 20

Narrbegin Exhibit 8.2 Demand and cost information for a monopoly
 $$\begin{array} { | c | c | c | } 
\hline \text { Quantity } & \text { Price } & \text { Tatal Cost } \
\hline 0 & 40 & 10 \
\hline 1 & 30 & 15 \
\hline 2 & 20 & 25 \
\hline 3 & 10 & 40 \
\hline 4 & 0 & 60 \
\hline
\end{array}$$ 
-Refer to Exhibit 8.2. Using the rule that focuses on the marginal approach to maximising profits, the monopolist maximises profit by choosing price equal to:

Accepted Answer

A)  $0. 
B)  $10. 
C)  $20. 
D)  $30. 
A)  $0. 
B)  $10. 
C)  $20. 
D)  $30.

Given similar market conditions, we would expect a monopolist to:

Electricity and water are usually supplied to households by one supplier because:

The demand curve for a monopolist is:

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, if a firm buys all the other firms in this market and becomes a monopolist, we would expect:

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, if competition was introduced in a monopoly market, we could expect which of the following to occur?

If the monopolist can discriminate between buyers, then it is optimal to charge:

Research on the role of monopolies in an economy shows:

Monopolists are criticised because they are inefficient. What is meant by this statement?

A monopoly market is characterised by many sellers of a product which has few, if any, suitable substitutes.

A monopoly can successfully price-discriminate as long as there is no competition.

Water is often provided to households by one supplier because:

In contrast to a perfectly competitive firm, a monopolist earns:

To maximise its profit, a monopoly should choose a price where demand is:

A natural monopoly occurs because:

A monopoly earns the most profit by charging a price where demand is inelastic.

A monopolist earning economic profit in the short run determines that, at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?

When is a monopolist able to charge a lower price than a competitive firm?

A single-priced monopolist earns an economic profit only when:

An industry in which total costs are kept to a minimum because only one firm serves the whole market is called a:

Narrbegin Exhibit 8.2 Demand and cost information for a monopoly Quantity Price Tatal Cost 0 40 10 1 30 15 2 20 25 3 10 40 4 0 60 -Refer to Exhibit 8.2. Using the rule that focuses on the marginal approach to maximising profits, the monopolist maximises profit by choosing price equal to:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

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Exam 9: Monopoly

Given similar market conditions, we would expect a monopolist to:

Electricity and water are usually supplied to households by one supplier because:

The demand curve for a monopolist is:

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, if a firm buys all the other firms in this market and becomes a monopolist, we would expect:

Narrbegin Exhibit 8.7 -According to Exhibit 8.7, if competition was introduced in a monopoly market, we could expect which of the following to occur?

If the monopolist can discriminate between buyers, then it is optimal to charge:

Research on the role of monopolies in an economy shows:

Monopolists are criticised because they are inefficient. What is meant by this statement?

A monopoly market is characterised by many sellers of a product which has few, if any, suitable substitutes.

A monopoly can successfully price-discriminate as long as there is no competition.

Water is often provided to households by one supplier because:

In contrast to a perfectly competitive firm, a monopolist earns:

To maximise its profit, a monopoly should choose a price where demand is:

A natural monopoly occurs because:

A monopoly earns the most profit by charging a price where demand is inelastic.

A monopolist earning economic profit in the short run determines that, at its present level of output, marginal revenue is $23 and marginal cost is $30. Which of the following should the firm do to increase profit?

When is a monopolist able to charge a lower price than a competitive firm?

A single-priced monopolist earns an economic profit only when:

An industry in which total costs are kept to a minimum because only one firm serves the whole market is called a:

Narrbegin Exhibit 8.2 Demand and cost information for a monopoly Quantity Price Tatal Cost 0 40 10 1 30 15 2 20 25 3 10 40 4 0 60 -Refer to Exhibit 8.2. Using the rule that focuses on the marginal approach to maximising profits, the monopolist maximises profit by choosing price equal to:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Markets in Action

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters