Question 1

A perfectly price-discriminating monopolist is able to

Accepted Answer

A)  maximize profit and produce a socially-optimal level of output. 
B)  maximize profit, but not produce a socially-optimal level of output. 
C)  produce a socially-optimal level of output, but not maximize profit. 
D)  exercise illegal preferences regarding the race and/or gender of its employees. 
A)  maximize profit and produce a socially-optimal level of output. 
B)  maximize profit, but not produce a socially-optimal level of output. 
C)  produce a socially-optimal level of output, but not maximize profit. 
D)  exercise illegal preferences regarding the race and/or gender of its employees.

Question 2

Figure 15-4  
-Refer to Figure 15-4. If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to

Accepted Answer

A)  remain unchanged. 
B)  decrease. 
C)  increase as long as the new level of output is at least Q2. 
D)  increase as long as the new level of output is at least Q1. 
A)  remain unchanged. 
B)  decrease. 
C)  increase as long as the new level of output is at least Q2. 
D)  increase as long as the new level of output is at least Q1.

Question 3

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost, the government will likely need to subsidize the firm.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements is true?

Accepted Answer

A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (ii) and (iii) only 
A)  (ii) only 
B)  (iii) only 
C)  (i) and (ii) only 
D)  (ii) and (iii) only

Question 5

A monopoly market

Accepted Answer

A)  always maximizes total economic well-being. 
B)  always minimizes consumer surplus. 
C)  generally fails to maximize total economic well-being. 
D)  generally fails to maximize producer surplus. 
A)  always maximizes total economic well-being. 
B)  always minimizes consumer surplus. 
C)  generally fails to maximize total economic well-being. 
D)  generally fails to maximize producer surplus.

Question 6

Marginal revenue can become negative for

Accepted Answer

A)  both competitive and monopoly firms. 
B)  competitive firms but not for monopoly firms. 
C)  monopoly firms but not for competitive firms. 
D)  neither competitive nor monopoly firms. 
A)  both competitive and monopoly firms. 
B)  competitive firms but not for monopoly firms. 
C)  monopoly firms but not for competitive firms. 
D)  neither competitive nor monopoly firms.

Question 7

Table 15-21
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is
able to engage in perfect price discrimination.  
-Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th tie?

Accepted Answer

A)  $80 
B)  $100 
C)  $110 
D)  $120 
A)  $80 
B)  $100 
C)  $110 
D)  $120

Question 8

Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. The socially efficient level of production is 12 units. The demand curve and marginal cost curves are linear. What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)  $4 
B)  $6 
C)  $12 
D)  $16 
A)  $4 
B)  $6 
C)  $12 
D)  $16

Question 9

When a firm's average total cost curve continually declines, the firm is a

Accepted Answer

A)  government-created monopoly. 
B)  natural monopoly. 
C)  revenue monopoly. 
D)  All of the above are correct. 
A)  government-created monopoly. 
B)  natural monopoly. 
C)  revenue monopoly. 
D)  All of the above are correct.

Question 10

Table 15-4
A monopolist faces the following demand curve:  
-Refer to Table 15-4. If the monopolist produces 10 units, what is its average revenue?

Accepted Answer

A)  $100 
B)  $15 
C)  $10 
D)  $1 
A)  $100 
B)  $15 
C)  $10 
D)  $1

Question 11

Scenario 15-5
An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc.
-Refer to Scenario 15-5. How much additional profit can the airline earn by charging each customer their willingness to pay relative to charging a flat price of $300 per ticket?

Accepted Answer

A)  $10,000 
B)  $15,000 
C)  $30,000 
D)  $45,000 
A)  $10,000 
B)  $15,000 
C)  $30,000 
D)  $45,000

Question 12

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.  
-Refer to Table 15-7. Sally will maximize her profits by selling

Accepted Answer

A)  3 pairs of shoes. 
B)  4 pairs of shoes. 
C)  6 pairs of shoes. 
D)  7 pairs of shoes. 
A)  3 pairs of shoes. 
B)  4 pairs of shoes. 
C)  6 pairs of shoes. 
D)  7 pairs of shoes.

Question 13

Table 15-20
A monopolist faces the following demand curve:  
-Refer to Table 15-20. If a monopolist faces a constant marginal cost of $20, how much output should the firm produce in order to maximize profit?

Accepted Answer

A)  2 units 
B)  3 units 
C)  4 units 
D)  5 units 
A)  2 units 
B)  3 units 
C)  4 units 
D)  5 units

Question 14

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 15

Figure 15-23  
-Refer to Figure 15-23. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Accepted Answer

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

Question 16

What is the shape of the monopolist's marginal revenue curve?

Accepted Answer

A)  a downward-sloping line that is identical to the demand curve 
B)  a downward-sloping line that lies below the demand curve 
C)  a horizontal line that is identical to the demand curve 
D)  a horizontal line that lies below the demand curve 
A)  a downward-sloping line that is identical to the demand curve 
B)  a downward-sloping line that lies below the demand curve 
C)  a horizontal line that is identical to the demand curve 
D)  a horizontal line that lies below the demand curve

Question 17

Table 15-13
The following table gives information on the price, quantity, and total cost of production for a monopolist.  
-Refer to Table 15-13. How much profit will the firm earn at the profit-maximizing price?

Accepted Answer

A)  $9 
B)  $12 
C)  $15 
D)  $18 
A)  $9 
B)  $12 
C)  $15 
D)  $18

Question 18

If a monopolist is able to perfectly price discriminate,

Accepted Answer

A)  consumer surplus is always increased. 
B)  total surplus is always decreased. 
C)  consumer surplus and deadweight losses are transformed into monopoly profits. 
D)  the price effect dominates the output effect on monopoly revenue. 
A)  consumer surplus is always increased. 
B)  total surplus is always decreased. 
C)  consumer surplus and deadweight losses are transformed into monopoly profits. 
D)  the price effect dominates the output effect on monopoly revenue.

Question 19

Scenario 15-3
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34.
-Refer to Scenario 15-3. At Q = 500, the firm's profit is

Accepted Answer

A)  $13,000. 
B)  $15,000. 
C)  $17,000. 
D)  $30,000. 
A)  $13,000. 
B)  $15,000. 
C)  $17,000. 
D)  $30,000.

Question 20

Table 15-22  
-Refer to Table 15-22. The marginal revenue becomes negative with the production of which unit of output?

Accepted Answer

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

Exam 15: Monopoly

A perfectly price-discriminating monopolist is able to

Figure 15-4 -Refer to Figure 15-4. If the monopoly firm is currently producing Q3 units of output, then a decrease in output will necessarily cause profit to

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost, the government will likely need to subsidize the firm.

Which of the following statements is true?

A monopoly market

Marginal revenue can become negative for

When a firm's average total cost curve continually declines, the firm is a

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its average revenue?

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. Sally will maximize her profits by selling

Table 15-20 A monopolist faces the following demand curve: -Refer to Table 15-20. If a monopolist faces a constant marginal cost of $20, how much output should the firm produce in order to maximize profit?

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

Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

What is the shape of the monopolist's marginal revenue curve?

Table 15-13 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-13. How much profit will the firm earn at the profit-maximizing price?

If a monopolist is able to perfectly price discriminate,

Scenario 15-3 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. -Refer to Scenario 15-3. At Q = 500, the firm's profit is

Table 15-22 -Refer to Table 15-22. The marginal revenue becomes negative with the production of which unit of output?

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 Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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