Question 1

Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?

Accepted Answer

A) medical doctor 
B) taxi cab driver 
C) the local pizza parlor 
D) the local telephone company 
E) the local Honda dealership 
A) medical doctor 
B) taxi cab driver 
C) the local pizza parlor 
D) the local telephone company 
E) the local Honda dealership

Question 2

With perfect price discrimination,the level of output

Accepted Answer

A) exceeds the efficient quantity. 
B) is the same as the amount produced by any monopoly that price discriminates. 
C) is the same as the amount produced in a perfectly competitive market. 
D) equals the amount produced by a single-price monopoly. 
E) is unknown. 
A) exceeds the efficient quantity. 
B) is the same as the amount produced by any monopoly that price discriminates. 
C) is the same as the amount produced in a perfectly competitive market. 
D) equals the amount produced by a single-price monopoly. 
E) is unknown.

Question 3

In states where the government runs liquor stores,the monopoly results from

Accepted Answer

A) economies of scale. 
B) legal restrictions. 
C) control of an essential resource. 
D) patents. 
E) public fear. 
A) economies of scale. 
B) legal restrictions. 
C) control of an essential resource. 
D) patents. 
E) public fear.

Question 4

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC)is the sole provider of cable television to the residents of this Central Florida community.If TWC operated under an average cost pricing rule,what is the price of cable television in Oakland?

Accepted Answer

A) $40 
B) $30 
C) $20 
D) $10 
E) $50 
A) $40 
B) $30 
C) $20 
D) $10 
E) $50

Question 5

Price discrimination is possible,in part,because

Accepted Answer

A) costs of production vary as output increases. 
B) monopolies are regulated. 
C) monopolies don't profit maximize. 
D) the willingness to pay can vary among groups of buyers. 
E) monopolies face horizontal demand curves. 
A) costs of production vary as output increases. 
B) monopolies are regulated. 
C) monopolies don't profit maximize. 
D) the willingness to pay can vary among groups of buyers. 
E) monopolies face horizontal demand curves.

Question 6

-In the above figure,a perfectly competitive market will have a price of ________,and a single-price monopoly will have a price of ________.

Accepted Answer

A) P1 and quantity of Q1;P2 and quantity of Q2 
B) P2 and quantity of Q2;P1 and quantity of Q1 
C) P3 and quantity of Q3;P1 and quantity of Q1 
D) P2 and quantity of Q2;P3 and quantity of Q1 
E) P2 and quantity of Q1;P1 and quantity of Q1 
A) P1 and quantity of Q1;P2 and quantity of Q2 
B) P2 and quantity of Q2;P1 and quantity of Q1 
C) P3 and quantity of Q3;P1 and quantity of Q1 
D) P2 and quantity of Q2;P3 and quantity of Q1 
E) P2 and quantity of Q1;P1 and quantity of Q1

Question 7

Which of the following describes a barrier to entry?

Accepted Answer

A) something that establishes a barrier to expanding output 
B) anything that protects a firm from the arrival of new competitors 
C) a government regulation that bars a monopoly from earning an economic profit 
D) firms already in the market incurring economic losses so that no new firm wants to enter the market 
E) Firms are legally prohibited from exiting the market in order to enter another market. 
A) something that establishes a barrier to expanding output 
B) anything that protects a firm from the arrival of new competitors 
C) a government regulation that bars a monopoly from earning an economic profit 
D) firms already in the market incurring economic losses so that no new firm wants to enter the market 
E) Firms are legally prohibited from exiting the market in order to enter another market.

Question 8

-Use the figure above to answer this question.Mary is the only veterinarian in a small town.To maximize her profit,Mary will choose to treat ________ animals per hour and charge ________ per customer in order to ________.

Accepted Answer

A) 4;$50;maximize profit 
B) 6;$20;maximize profit 
C) 6;$30;minimize average total cost 
D) 4;$50;operate on the inelastic portion of her demand curve 
E) 6;$20;minimize cost in order to attract more customers 
A) 4;$50;maximize profit 
B) 6;$20;maximize profit 
C) 6;$30;minimize average total cost 
D) 4;$50;operate on the inelastic portion of her demand curve 
E) 6;$20;minimize cost in order to attract more customers

Question 9

-In the figure below,draw and label the demand and cost curves of a monopoly.Identify the quantity a single-price monopoly will produce by labeling it Qm and identify the price by labeling it Pm.

Accepted Answer

@#IMG-DLM& The compl

Question 10

An airline company

Accepted Answer

A) cannot price discriminate because it is against the law. 
B) price discriminates by charging higher prices to business travelers. 
C) price discriminates by charging lower prices to business travelers. 
D) price discriminates even though its profits are lower because competition forces it to do so. 
E) has fewer customers because it price discriminates than it would have if it did not price discriminate. 
A) cannot price discriminate because it is against the law. 
B) price discriminates by charging higher prices to business travelers. 
C) price discriminates by charging lower prices to business travelers. 
D) price discriminates even though its profits are lower because competition forces it to do so. 
E) has fewer customers because it price discriminates than it would have if it did not price discriminate.

Question 11

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost.The monopoly can increase its profit by

Accepted Answer

A) shutting down. 
B) lowering its price and increasing its output. 
C) raising its price and decreasing its output. 
D) lowering its price and decreasing its output. 
E) not changing its price and increasing its output. 
A) shutting down. 
B) lowering its price and increasing its output. 
C) raising its price and decreasing its output. 
D) lowering its price and decreasing its output. 
E) not changing its price and increasing its output.

Question 12

If a natural monopoly is told to set price equal to average cost,then the firm

Accepted Answer

A) is not able to set marginal revenue equal to marginal cost. 
B) automatically also sets price equal to marginal cost. 
C) will make a substantial economic profit. 
D) will incur an economic loss. 
E) sets a price that is lower than its marginal cost. 
A) is not able to set marginal revenue equal to marginal cost. 
B) automatically also sets price equal to marginal cost. 
C) will make a substantial economic profit. 
D) will incur an economic loss. 
E) sets a price that is lower than its marginal cost.

Question 13

The social interest theory of regulation is defined as the

Accepted Answer

A) use of regulations to maximize firms' profits. 
B) use of regulations to assure an efficient use of resources. 
C) removal of regulations on business activities. 
D) implementation and removal of regulations on the cable TV industry. 
E) use of rate of return regulation. 
A) use of regulations to maximize firms' profits. 
B) use of regulations to assure an efficient use of resources. 
C) removal of regulations on business activities. 
D) implementation and removal of regulations on the cable TV industry. 
E) use of rate of return regulation.

Question 14

-The above figure represents a perfectly competitive industry that is taken over by a single firm and operated as a monopoly.
a.What was the competitive price and quantity?
b.What is the monopoly price and quantity?
c.What area represents consumer surplus under perfect competition?
d.What area represents consumer surplus under monopoly?
e.What area represents the deadweight loss of monopoly?

Accepted Answer

a.The competitive price was P2 and the c

Question 15

A monopoly will arise if

Accepted Answer

A) two out of three of a town's pizzerias go out of business and only one new pizzeria opens. 
B) the town council passes a law granting Nick's Pizza the exclusive right to operate in that town. 
C) Papa Joe's Pizza becomes the largest pizza producer in town and Nick's Pizza stays small in size. 
D) several big pizza chains force several small pizzerias out of business. 
E) people decide they like pizza more than before so some pizzerias gain new customers. 
A) two out of three of a town's pizzerias go out of business and only one new pizzeria opens. 
B) the town council passes a law granting Nick's Pizza the exclusive right to operate in that town. 
C) Papa Joe's Pizza becomes the largest pizza producer in town and Nick's Pizza stays small in size. 
D) several big pizza chains force several small pizzerias out of business. 
E) people decide they like pizza more than before so some pizzerias gain new customers.

Question 16

The figure above shows a natural monopoly.
-In the figure above,if the firm is regulated using a marginal cost pricing rule,the consumer surplus created is equal to the area of

Accepted Answer

A) ABG. 
B) ACF. 
C) BCFG. 
D) BCE. 
E) None of the above because there is no consumer surplus created. 
A) ABG. 
B) ACF. 
C) BCFG. 
D) BCE. 
E) None of the above because there is no consumer surplus created.

Question 17

A ________ can price discriminate if,in part,it ________.

Accepted Answer

A) natural monopoly;is the only seller of a good or service 
B) monopoly;can prevent resales of its product 
C) monopoly;is the only seller of a good or service 
D) perfectly competitive firm;can sell goods at a lower price than a monopoly 
E) perfectly competitive firm;changes from a price taker to a price maker 
A) natural monopoly;is the only seller of a good or service 
B) monopoly;can prevent resales of its product 
C) monopoly;is the only seller of a good or service 
D) perfectly competitive firm;can sell goods at a lower price than a monopoly 
E) perfectly competitive firm;changes from a price taker to a price maker

Question 18

The social interest theory of regulation asserts that regulation

Accepted Answer

A) seeks an efficient use of resources. 
B) is aimed at keeping prices as low as possible. 
C) helps firms maximize economic profit. 
D) of a natural monopoly must be done using rate of return regulation. 
E) does not work for society as well as would allowing the firms freedom from regulation. 
A) seeks an efficient use of resources. 
B) is aimed at keeping prices as low as possible. 
C) helps firms maximize economic profit. 
D) of a natural monopoly must be done using rate of return regulation. 
E) does not work for society as well as would allowing the firms freedom from regulation.

Question 19

-The figure above shows a natural monopoly that the government must regulate.If the government uses ________,the firm produces ________ units per week.

Accepted Answer

A) the HHI;50 
B) an average cost pricing rule;30 
C) rate of return regulation;40 
D) social interest regulation;30 
E) a marginal cost pricing rule;20 
A) the HHI;50 
B) an average cost pricing rule;30 
C) rate of return regulation;40 
D) social interest regulation;30 
E) a marginal cost pricing rule;20

Question 20

Which of the following is an example of price discrimination?

Accepted Answer

A) UPS charges more if a package is sent from New York to Hawaii and less if it is sent from New York to New Jersey. 
B) Frank's Furniture shop charges no delivery fee for furniture delivered within Dutchess County but charges $40 delivery fee outside of the county. 
C) Albert pays 25 percent less on prescription drugs because he is a senior citizen. 
D) Only answers A and B are correct. 
E) Answers A,B,and C are all correct. 
A) UPS charges more if a package is sent from New York to Hawaii and less if it is sent from New York to New Jersey. 
B) Frank's Furniture shop charges no delivery fee for furniture delivered within Dutchess County but charges $40 delivery fee outside of the county. 
C) Albert pays 25 percent less on prescription drugs because he is a senior citizen. 
D) Only answers A and B are correct. 
E) Answers A,B,and C are all correct.

Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?

With perfect price discrimination,the level of output

In states where the government runs liquor stores,the monopoly results from

Price discrimination is possible,in part,because

-In the above figure,a perfectly competitive market will have a price of ,and a single-price monopoly will have a price of .

Which of the following describes a barrier to entry?

-Use the figure above to answer this question.Mary is the only veterinarian in a small town.To maximize her profit,Mary will choose to treat animals per hour and charge per customer in order to .

-In the figure below,draw and label the demand and cost curves of a monopoly.Identify the quantity a single-price monopoly will produce by labeling it Qm and identify the price by labeling it Pm.

An airline company

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost.The monopoly can increase its profit by

If a natural monopoly is told to set price equal to average cost,then the firm

The social interest theory of regulation is defined as the

A monopoly will arise if

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using a marginal cost pricing rule,the consumer surplus created is equal to the area of

A can price discriminate if,in part,it .

The social interest theory of regulation asserts that regulation

-The figure above shows a natural monopoly that the government must regulate.If the government uses ,the firm produces units per week.

Which of the following is an example of price discrimination?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 12: Monopoly

Which of the following is an example of a person or firm that is most likely to have been granted a public franchise?

With perfect price discrimination,the level of output

In states where the government runs liquor stores,the monopoly results from

Price discrimination is possible,in part,because

-In the above figure,a perfectly competitive market will have a price of ________,and a single-price monopoly will have a price of ________.

Which of the following describes a barrier to entry?

-Use the figure above to answer this question.Mary is the only veterinarian in a small town.To maximize her profit,Mary will choose to treat ________ animals per hour and charge ________ per customer in order to ________.

-In the figure below,draw and label the demand and cost curves of a monopoly.Identify the quantity a single-price monopoly will produce by labeling it Qm and identify the price by labeling it Pm.

An airline company

Suppose that a monopoly is currently producing the quantity at which marginal revenue is less than marginal cost.The monopoly can increase its profit by

If a natural monopoly is told to set price equal to average cost,then the firm

The social interest theory of regulation is defined as the

A monopoly will arise if

The figure above shows a natural monopoly. -In the figure above,if the firm is regulated using a marginal cost pricing rule,the consumer surplus created is equal to the area of

A ________ can price discriminate if,in part,it ________.

The social interest theory of regulation asserts that regulation

-The figure above shows a natural monopoly that the government must regulate.If the government uses ________,the firm produces ________ units per week.

Which of the following is an example of price discrimination?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Global Markets in Action

Externalities: Pollution, education, and Health Care

Production and Cost

Perfect Competition

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

-In the above figure,a perfectly competitive market will have a price of ,and a single-price monopoly will have a price of .

-Use the figure above to answer this question.Mary is the only veterinarian in a small town.To maximize her profit,Mary will choose to treat animals per hour and charge per customer in order to .

A can price discriminate if,in part,it .

-The figure above shows a natural monopoly that the government must regulate.If the government uses ,the firm produces units per week.