Question 1

A natural monopoly

Accepted Answer

A) faces more competition after regulation. 
B) might exaggerate its costs if it is regulated using rate of return regulation. 
C) might falsely minimize its costs if it is regulated using rate of return regulation. 
D) might falsely minimize its costs if it is regulated using a marginal cost pricing rule. 
E) is allowed to maximize its profit under a marginal cost pricing rule. 
A) faces more competition after regulation. 
B) might exaggerate its costs if it is regulated using rate of return regulation. 
C) might falsely minimize its costs if it is regulated using rate of return regulation. 
D) might falsely minimize its costs if it is regulated using a marginal cost pricing rule. 
E) is allowed to maximize its profit under a marginal cost pricing rule.

Question 2

The U.S.Postal Service has a monopoly over first-class mail service because

Accepted Answer

A) the government has granted this agency a public franchise. 
B) stamps are copyrighted. 
C) stamps are trademarked. 
D) stamps are patented. 
E) it owns a vital resource,namely all mailboxes. 
A) the government has granted this agency a public franchise. 
B) stamps are copyrighted. 
C) stamps are trademarked. 
D) stamps are patented. 
E) it owns a vital resource,namely all mailboxes.

Question 3

A monopoly is

Accepted Answer

A) a price taker. 
B) able to ignore the demand for its product when setting its price. 
C) able to set the price for its product. 
D) able to earn only a normal profit in the long run. 
E) a firm with no marginal revenue curve. 
A) a price taker. 
B) able to ignore the demand for its product when setting its price. 
C) able to set the price for its product. 
D) able to earn only a normal profit in the long run. 
E) a firm with no marginal revenue curve.

Question 4

Two types of barriers to entry are called ________ barriers to entry and ________ barriers to entry.

Accepted Answer

A) legal;illegal 
B) natural;legal 
C) natural;illegal 
D) natural;rent seeking 
E) ownership;rent seeking 
A) legal;illegal 
B) natural;legal 
C) natural;illegal 
D) natural;rent seeking 
E) ownership;rent seeking

Question 5

How do the price,output,consumer surplus,economic profit,and total surplus for a single-price monopoly compare to that of a competitive industry?

Accepted Answer

For the monopoly,price is high

Question 6

Which of the following is a legal barrier to entry?
I.public franchise
Ii.government license
Iii.patent

Accepted Answer

A) iii only 
B) i and iii 
C) ii and iii 
D) i,ii,and iii 
E) i and ii 
A) iii only 
B) i and iii 
C) ii and iii 
D) i,ii,and iii 
E) i and ii

Question 7

Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

Accepted Answer

The single-price monopoly crea

Question 8

The table below gives a monopoly's demand schedule.Complete the table by calculating the total revenue and the marginal revenue.

Accepted Answer

@#IMG-DLM& The compl

Question 9

Which of the following statements is correct?

Accepted Answer

A) Monopolies are guaranteed to earn an economic profit. 
B) The market demand and the firm's demand are the same for a monopoly. 
C) Monopolies have perfectly inelastic demand for the product sold. 
D) Because a monopoly is the only firm in the market,its supply curve is the same as the market demand curve. 
E) Because a monopoly is the only firm in the market,its marginal revenue curve must be the same as the market demand curve. 
A) Monopolies are guaranteed to earn an economic profit. 
B) The market demand and the firm's demand are the same for a monopoly. 
C) Monopolies have perfectly inelastic demand for the product sold. 
D) Because a monopoly is the only firm in the market,its supply curve is the same as the market demand curve. 
E) Because a monopoly is the only firm in the market,its marginal revenue curve must be the same as the market demand curve.

Question 10

If Microsoft is a monopoly and currently charges prices where its demand is elastic,then Microsoft's marginal revenue is

Accepted Answer

A) negative. 
B) positive. 
C) zero. 
D) minimized. 
E) undefined. 
A) negative. 
B) positive. 
C) zero. 
D) minimized. 
E) undefined.

Question 11

A monopoly

Accepted Answer

A) must determine the price it will charge. 
B) faces extensive competition from firms making close substitutes. 
C) cannot price discriminate because such a pricing strategy is illegal in the United States. 
D) has no control over the price it can charge. 
E) Both answers B and C are correct. 
A) must determine the price it will charge. 
B) faces extensive competition from firms making close substitutes. 
C) cannot price discriminate because such a pricing strategy is illegal in the United States. 
D) has no control over the price it can charge. 
E) Both answers B and C are correct.

Question 12

Give an example of price discrimination.

Accepted Answer

Price discrimination occurs wh

Question 13

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,Paul produces ________ pillows per hour,and if the market was perfectly competitive,________ pillows per hour would be produced.

Accepted Answer

A) 0;4,000 
B) 3,000;4,000 
C) 4,000;4,000 
D) 3,000;3,000 
E) 0;3,000 
A) 0;4,000 
B) 3,000;4,000 
C) 4,000;4,000 
D) 3,000;3,000 
E) 0;3,000

Question 14

If a monopoly wants to sell a larger quantity,it must

Accepted Answer

A) set a higher price. 
B) maintain the current price. 
C) set a lower price. 
D) implement new technology. 
E) increase the barrier to entry that protects it. 
A) set a higher price. 
B) maintain the current price. 
C) set a lower price. 
D) implement new technology. 
E) increase the barrier to entry that protects it.

Question 15

Price cap regulation involves

Accepted Answer

A) setting the monopoly's price equal to its average total cost. 
B) setting the monopoly's price equal to its profit-maximizing price. 
C) setting a maximum price the monopoly may charge. 
D) assuming a natural monopoly will not charge a higher than profit-maximizing price. 
E) setting the monopoly's price equal to its marginal cost. 
A) setting the monopoly's price equal to its average total cost. 
B) setting the monopoly's price equal to its profit-maximizing price. 
C) setting a maximum price the monopoly may charge. 
D) assuming a natural monopoly will not charge a higher than profit-maximizing price. 
E) setting the monopoly's price equal to its marginal cost.

Question 16

"If Michigan's electric utilities were allowed to use marginal cost pricing,it would lead to economic profits for these utilities." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is incorrect.Imp

Question 17

"Compared to a competitive market,a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is correct.A sin

Question 18

Compared to a similar perfectly competitive industry,a single-price monopoly

Accepted Answer

A) creates a deadweight loss and decreases economic profit. 
B) produces more output. 
C) creates a deadweight loss and decreases consumer surplus. 
D) is more efficient because there is no wasteful competition. 
E) sets a lower price because there is less competition. 
A) creates a deadweight loss and decreases economic profit. 
B) produces more output. 
C) creates a deadweight loss and decreases consumer surplus. 
D) is more efficient because there is no wasteful competition. 
E) sets a lower price because there is less competition.

Question 19

-Christy's Haircuts,the sole supplier of haircuts in a small town,faces the demand schedule shown in the table above.What is Christy's marginal revenue from the 35th haircut?

Accepted Answer

A) zero 
B) -$5.00 
C) $5.00 
D) $12.50 
A) zero 
B) -$5.00 
C) $5.00 
D) $12.50

Question 20

One of the requirements for a monopoly is that

Accepted Answer

A) products are high priced. 
B) there are several close substitutes for the product. 
C) there is a product with no close substitutes. 
D) the product cannot be produced by small firms. 
E) there is no barrier to entry. 
A) products are high priced. 
B) there are several close substitutes for the product. 
C) there is a product with no close substitutes. 
D) the product cannot be produced by small firms. 
E) there is no barrier to entry.

A natural monopoly

The U.S.Postal Service has a monopoly over first-class mail service because

A monopoly is

Two types of barriers to entry are called barriers to entry and barriers to entry.

How do the price,output,consumer surplus,economic profit,and total surplus for a single-price monopoly compare to that of a competitive industry?

Which of the following is a legal barrier to entry? I.public franchise Ii.government license Iii.patent

Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

The table below gives a monopoly's demand schedule.Complete the table by calculating the total revenue and the marginal revenue.

Which of the following statements is correct?

If Microsoft is a monopoly and currently charges prices where its demand is elastic,then Microsoft's marginal revenue is

A monopoly

Give an example of price discrimination.

If a monopoly wants to sell a larger quantity,it must

Price cap regulation involves

"If Michigan's electric utilities were allowed to use marginal cost pricing,it would lead to economic profits for these utilities." Is the previous statement correct or incorrect? Explain your answer.

"Compared to a competitive market,a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

Compared to a similar perfectly competitive industry,a single-price monopoly

-Christy's Haircuts,the sole supplier of haircuts in a small town,faces the demand schedule shown in the table above.What is Christy's marginal revenue from the 35th haircut?

One of the requirements for a monopoly is that

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

A natural monopoly

The U.S.Postal Service has a monopoly over first-class mail service because

A monopoly is

Two types of barriers to entry are called ________ barriers to entry and ________ barriers to entry.

How do the price,output,consumer surplus,economic profit,and total surplus for a single-price monopoly compare to that of a competitive industry?

Which of the following is a legal barrier to entry? I.public franchise Ii.government license Iii.patent

Which creates a larger deadweight loss,perfect competition or a single-price monopoly?

The table below gives a monopoly's demand schedule.Complete the table by calculating the total revenue and the marginal revenue.

Which of the following statements is correct?

If Microsoft is a monopoly and currently charges prices where its demand is elastic,then Microsoft's marginal revenue is

A monopoly

Give an example of price discrimination.

If a monopoly wants to sell a larger quantity,it must

Price cap regulation involves

"If Michigan's electric utilities were allowed to use marginal cost pricing,it would lead to economic profits for these utilities." Is the previous statement correct or incorrect? Explain your answer.

"Compared to a competitive market,a single-price monopoly decreases the consumer surplus and increases the economic profit." Is the previous statement correct or incorrect? Explain your answer.

Compared to a similar perfectly competitive industry,a single-price monopoly

-Christy's Haircuts,the sole supplier of haircuts in a small town,faces the demand schedule shown in the table above.What is Christy's marginal revenue from the 35th haircut?

One of the requirements for a monopoly is that

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

Two types of barriers to entry are called barriers to entry and barriers to entry.