Question 1

Figure 15-18  
-Refer to Figure 15-18. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Accepted Answer

A)  $0. 
B)  $1,000. 
C)  $2,000. 
D)  $4,000. 
A)  $0. 
B)  $1,000. 
C)  $2,000. 
D)  $4,000.

Question 2

Table 15-20
A monopolist faces the following demand curve:  
-Refer to Table 15-20. If a monopolist faces a constant marginal cost of $10, 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 3

Which of the following is an example of price discrimination?

Accepted Answer

A)  Nabisco provides cents-off coupons for its products. 
B)  Amtrak offers a lower price for weekend travel compared to weekday rates on the same routes. 
C)  Hotel rates for AAA members are lower than for nonmembers. 
D)  All of the above are correct. 
A)  Nabisco provides cents-off coupons for its products. 
B)  Amtrak offers a lower price for weekend travel compared to weekday rates on the same routes. 
C)  Hotel rates for AAA members are lower than for nonmembers. 
D)  All of the above are correct.

Question 4

Figure 15-6  
-Refer to Figure 15-6. How much output will the monopolist produce?

Accepted Answer

A)  O 
B)  T 
C)  W 
D)  Z 
A)  O 
B)  T 
C)  W 
D)  Z

Question 5

When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly

Accepted Answer

A)  will experience a loss. 
B)  will experience a price below average total cost. 
C)  may rely on a government subsidy to remain in business. 
D)  All of the above are correct. 
A)  will experience a loss. 
B)  will experience a price below average total cost. 
C)  may rely on a government subsidy to remain in business. 
D)  All of the above are correct.

Question 6

University financial aid can be viewed as a type of price discrimination.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die- hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $150?

Accepted Answer

A)  $75,000 
B)  $100,000 
C)  $150,000 
D)  $175,000 
A)  $75,000 
B)  $100,000 
C)  $150,000 
D)  $175,000

Question 8

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an example of price discrimination?

Accepted Answer

A)  An online bookstore charges more for overnight shipping than standard shipping when customers buy books from it. 
B)  Airline tickets are more expensive for first-class seats than for coach. 
C)  Hotel rates for AAA members are lower than for nonmembers. 
D)  All of the above are correct. 
A)  An online bookstore charges more for overnight shipping than standard shipping when customers buy books from it. 
B)  Airline tickets are more expensive for first-class seats than for coach. 
C)  Hotel rates for AAA members are lower than for nonmembers. 
D)  All of the above are correct.

Question 10

In the majority of cases where there is a natural monopoly in the United States, the government usually deals with the problem

Accepted Answer

A)  by splitting the natural monopoly into smaller companies. 
B)  through regulation. 
C)  by turning the natural monopoly into a public enterprise. 
D)  by doing nothing. 
A)  by splitting the natural monopoly into smaller companies. 
B)  through regulation. 
C)  by turning the natural monopoly into a public enterprise. 
D)  by doing nothing.

Question 11

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Accepted Answer

perfectly

Question 12

Suppose a firm has a monopoly on the sale of a computer game and faces a downward-sloping demand curve. When selling the 50th game, the firm will always receive

Accepted Answer

A)  less marginal revenue on the 50th game than it received on the 49th game. 
B)  more average revenue on the 50th game than it received on the 49th game. 
C)  more total revenue on the 50 games than it received on the first 49 games. 
D)  Both b and c are correct. 
A)  less marginal revenue on the 50th game than it received on the 49th game. 
B)  more average revenue on the 50th game than it received on the 49th game. 
C)  more total revenue on the 50 games than it received on the first 49 games. 
D)  Both b and c are correct.

Question 13

When a single firm can supply a good or service to an entire market at a lower cost than could two or more firms, the industry is known as a

Accepted Answer

The answer of When a single firm can supply a...

Question 14

A natural monopoly arises when

Accepted Answer

A)  there are constant returns to scale over the relevant range of output. 
B)  there are economies of scale over the relevant range of output. 
C)  one firm owns a key natural resource. 
D)  the government gives a single firm the exclusive right to produce a particular good or service. 
A)  there are constant returns to scale over the relevant range of output. 
B)  there are economies of scale over the relevant range of output. 
C)  one firm owns a key natural resource. 
D)  the government gives a single firm the exclusive right to produce a particular good or service.

Question 15

A firm cannot price discriminate if it

Accepted Answer

A)  has perfect information about consumer demand. 
B)  operates in a competitive market. 
C)  faces a downward-sloping demand curve. 
D)  is regulated by the government. 
A)  has perfect information about consumer demand. 
B)  operates in a competitive market. 
C)  faces a downward-sloping demand curve. 
D)  is regulated by the government.

Question 16

The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

Accepted Answer

A) True 
 B)False

Question 17

Figure 15-23  
-Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

Accepted Answer

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

Question 18

If a product can be produced by a natural monopoly, society will benefit in the form of lower prices if the monopolist is broken up into several smaller firms.

Accepted Answer

A) True 
 B)False

Question 19

The economic inefficiency of a monopolist can be measured by the

Accepted Answer

A)  number of consumers who are unable to purchase the product because of its high price. 
B)  excess profit generated by monopoly firms. 
C)  poor quality of service offered by monopoly firms. 
D)  deadweight loss. 
A)  number of consumers who are unable to purchase the product because of its high price. 
B)  excess profit generated by monopoly firms. 
C)  poor quality of service offered by monopoly firms. 
D)  deadweight loss.

Question 20

For a monopoly, the level of output at which marginal revenue equals zero is also the level of output at which

Accepted Answer

A)  average revenue is zero. 
B)  profit is maximized. 
C)  total revenue is maximized. 
D)  marginal cost is zero. 
A)  average revenue is zero. 
B)  profit is maximized. 
C)  total revenue is maximized. 
D)  marginal cost is zero.

Exam 15: Monopoly

Figure 15-18 -Refer to Figure 15-18. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Table 15-20 A monopolist faces the following demand curve: -Refer to Table 15-20. If a monopolist faces a constant marginal cost of $10, how much output should the firm produce in order to maximize profit?

Which of the following is an example of price discrimination?

Figure 15-6 -Refer to Figure 15-6. How much output will the monopolist produce?

When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly

University financial aid can be viewed as a type of price discrimination.

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Which of the following is an example of price discrimination?

In the majority of cases where there is a natural monopoly in the United States, the government usually deals with the problem

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Suppose a firm has a monopoly on the sale of a computer game and faces a downward-sloping demand curve. When selling the 50th game, the firm will always receive

When a single firm can supply a good or service to an entire market at a lower cost than could two or more firms, the industry is known as a

A natural monopoly arises when

A firm cannot price discriminate if it

The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

If a product can be produced by a natural monopoly, society will benefit in the form of lower prices if the monopolist is broken up into several smaller firms.

The economic inefficiency of a monopolist can be measured by the

For a monopoly, the level of output at which marginal revenue equals zero is also the level of output at which

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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Suppose a firm has a monopoly on the sale of a computer game and faces a downward-sloping demand curve. When selling the 50^t^hgame, the firm will always receive