Question 1

Figure 15-22  
-Refer to Figure 15-22. If the monopolist uses perfect price discrimination, how much deadweight loss results?

Accepted Answer

The answer of Figure 15-22  
-Refer to Figure 15-22....

Question 2

Which of the following statements is correct?

Accepted Answer

A)  Two examples of early antitrust laws are the Clinton and Stigler Antitrust Acts. 
B)  Antitrust laws automatically prevent mergers between companies that produce similar products. 
C)  Antitrust laws reduce the government's power to regulate private companies. 
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production. 
A)  Two examples of early antitrust laws are the Clinton and Stigler Antitrust Acts. 
B)  Antitrust laws automatically prevent mergers between companies that produce similar products. 
C)  Antitrust laws reduce the government's power to regulate private companies. 
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.

Question 3

Figure 15-7  
-Refer to Figure 15-7. In order to maximize profits, the monopolist should charge a price of

Accepted Answer

A)  $9. 
B)  $12. 
C)  $20. 
D)  $23. 
A)  $9. 
B)  $12. 
C)  $20. 
D)  $23.

Question 4

Figure 15-4  
-Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A)  P5 x Q3. 
B)  P4 x Q5. 
C)  P5-P3) x Q3. 
D)  P5-P4) x Q3. 
A)  P5 x Q3. 
B)  P4 x Q5. 
C)  P5-P3) x Q3. 
D)  P5-P4) x Q3.

Question 5

Deadweight loss

Accepted Answer

A)  measures monopoly inefficiency. 
B)  exceeds monopoly profits. 
C)  equals monopoly profits. 
D)  equals monopoly revenues minus profits. 
A)  measures monopoly inefficiency. 
B)  exceeds monopoly profits. 
C)  equals monopoly profits. 
D)  equals monopoly revenues minus profits.

Question 6

Figure 15-9  
-Refer to Figure 15-9. The monopolist's maximum profit

Accepted Answer

A)  is $1,600. 
B)  is $2,000. 
C)  is $2,500. 
D)  cannot be determined from the diagram. 
A)  is $1,600. 
B)  is $2,000. 
C)  is $2,500. 
D)  cannot be determined from the diagram.

Question 7

Figure 15-23  
-Refer to Figure 15-23. If a regulator requires the firm to charge an average cost price, what quantity will the firm produce?

Accepted Answer

The answer of Figure 15-23  
-Refer to Figure 15-23....

Question 8

By offering lower prices to customers who buy a large quantity, a monopoly is price discriminating.

Accepted Answer

A) True 
 B)False

Question 9

A monopolist produces

Accepted Answer

A)  more than the socially efficient quantity of output but at a higher price than in a competitive market. 
B)  less than the socially efficient quantity of output but at a higher price than in a competitive market. 
C)  the socially efficient quantity of output but at a higher price than in a competitive market. 
D)  possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market. 
A)  more than the socially efficient quantity of output but at a higher price than in a competitive market. 
B)  less than the socially efficient quantity of output but at a higher price than in a competitive market. 
C)  the socially efficient quantity of output but at a higher price than in a competitive market. 
D)  possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market.

Question 10

Figure 15-5  
-Refer to Figure 15-5. A profit-maximizing monopoly's total cost is equal to

Accepted Answer

A)  P2 x Q3. 
B)  P4 x Q3. 
C)  P5 x Q3. 
D)  P2-P5) x Q3. 
A)  P2 x Q3. 
B)  P4 x Q3. 
C)  P5 x Q3. 
D)  P2-P5) x Q3.

Question 11

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Accepted Answer

A)  A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost. 
B)  A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at the point where average revenue exceeds marginal cost. 
C)  For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-maximizing level of output is smaller than it is for larger levels of output. 
D)  For a profit-maximizing competitive firm, thinking at the margin is much more important than it is for a profit- maximizing monopolist. 
A)  A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost. 
B)  A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at the point where average revenue exceeds marginal cost. 
C)  For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-maximizing level of output is smaller than it is for larger levels of output. 
D)  For a profit-maximizing competitive firm, thinking at the margin is much more important than it is for a profit- maximizing monopolist.

Question 12

Which of the following statements is not correct?

Accepted Answer

A)  Two examples of early antitrust laws are the Sherman and Clayton Antitrust Acts. 
B)  Antitrust laws automatically prevent mergers between companies that produce similar products. 
C)  Antitrust laws give the government power to increase competition. 
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production. 
A)  Two examples of early antitrust laws are the Sherman and Clayton Antitrust Acts. 
B)  Antitrust laws automatically prevent mergers between companies that produce similar products. 
C)  Antitrust laws give the government power to increase competition. 
D)  Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.

Question 13

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Accepted Answer

A)  earn economic losses. 
B)  earn economic profits. 
C)  earn zero economic profits. 
D)  produce a lower quantity of output than is socially optimal. 
A)  earn economic losses. 
B)  earn economic profits. 
C)  earn zero economic profits. 
D)  produce a lower quantity of output than is socially optimal.

Question 14

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve. When selling the 100th widget, the firm will always receive

Accepted Answer

A)  less marginal revenue on the 100th widget than it received on the 99th widget. 
B)  more average revenue on the 100th widget than it received on the 99th widget. 
C)  more total revenue on the 100 widgets than it received on the first 99 widgets. 
D)  a lower average cost per unit at 100 units of output than at 99 units of output. 
A)  less marginal revenue on the 100th widget than it received on the 99th widget. 
B)  more average revenue on the 100th widget than it received on the 99th widget. 
C)  more total revenue on the 100 widgets than it received on the first 99 widgets. 
D)  a lower average cost per unit at 100 units of output than at 99 units of output.

Question 15

Figure 15-7  
-Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of

Accepted Answer

A)  $81. 
B)  $144. 
C)  $225. 
D)  $240. 
A)  $81. 
B)  $144. 
C)  $225. 
D)  $240.

Question 16

Which type of public policy toward monopolies is much more common in Europe than in the United States?

Accepted Answer

A)  antitrust laws 
B)  regulation 
C)  public ownership 
D)  "do nothing" 
A)  antitrust laws 
B)  regulation 
C)  public ownership 
D)  "do nothing"

Question 17

Monopolists can achieve any level of profit they desire because they have unlimited market power.

Accepted Answer

A) True 
 B)False

Question 18

Figure 15-4  
-Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Accepted Answer

A)  P5. 
B)  P4. 
C)  P3. 
D)  P1. 
A)  P5. 
B)  P4. 
C)  P3. 
D)  P1.

Question 19

What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10. The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and marginal revenue is $5. The socially efficient level of production is 110 units. The demand curve is linear and downward sloping, and the marginal cost curve is constant.

Accepted Answer

1/2*110-10

Question 20

Table 15-9
Consider the following demand and cost information for a monopoly.
  
-Refer to Table 15-9. What is the marginal revenue of the 3rd unit?

Accepted Answer

A)  $4 
B)  $12 
C)  $20 
D)  $28 
A)  $4 
B)  $12 
C)  $20 
D)  $28

Exam 14: Monopoly

Figure 15-22 -Refer to Figure 15-22. If the monopolist uses perfect price discrimination, how much deadweight loss results?

Which of the following statements is correct?

Figure 15-7 -Refer to Figure 15-7. In order to maximize profits, the monopolist should charge a price of

Figure 15-4 -Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to

Deadweight loss

Figure 15-9 -Refer to Figure 15-9. The monopolist's maximum profit

Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge an average cost price, what quantity will the firm produce?

By offering lower prices to customers who buy a large quantity, a monopoly is price discriminating.

A monopolist produces

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly's total cost is equal to

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Which of the following statements is not correct?

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve. When selling the 100th widget, the firm will always receive

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of

Which type of public policy toward monopolies is much more common in Europe than in the United States?

Monopolists can achieve any level of profit they desire because they have unlimited market power.

Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal revenue of the 3rd unit?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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