Question 1

If a perfectly competitive industry is taken over by a single firm that operates as a single-price monopoly,the price will ________ and the quantity will ________.

Accepted Answer

A) fall;decrease 
B) fall;increase 
C) rise;decrease 
D) rise;increase 
E) not change;decrease 
A) fall;decrease 
B) fall;increase 
C) rise;decrease 
D) rise;increase 
E) not change;decrease

Question 2

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is perfectly competitive,the quantity of steak is

Accepted Answer

A) 2,000 pounds. 
B) 3,000 pounds. 
C) 4,000 pounds. 
D) 5,000 pounds. 
E) less than 2,000 pounds. 
A) 2,000 pounds. 
B) 3,000 pounds. 
C) 4,000 pounds. 
D) 5,000 pounds. 
E) less than 2,000 pounds.

Question 3

The above figure shows a market.
-If the market in the figure above is a profit-maximizing single-price monopoly,the deadweight loss is the area ________.

Accepted Answer

A) ABH 
B) BFGH 
C) ACG 
D) BCD 
E) ACE 
A) ABH 
B) BFGH 
C) ACG 
D) BCD 
E) ACE

Question 4

If a single-price monopoly is making a large economic profit,what keeps other firms from competing away the profit?

Accepted Answer

A) There are barriers to entry. 
B) The monopoly must be keeping the amount earned secret. 
C) The market must be too small. 
D) The existing firm's ATC must be too large to allow competitors to enter and earn an economic profit. 
E) Nothing,other firms will enter and will compete away the profit. 
A) There are barriers to entry. 
B) The monopoly must be keeping the amount earned secret. 
C) The market must be too small. 
D) The existing firm's ATC must be too large to allow competitors to enter and earn an economic profit. 
E) Nothing,other firms will enter and will compete away the profit.

Question 5

Under a marginal cost pricing rule,a natural monopoly

Accepted Answer

A) makes a reasonable profit. 
B) makes an economic profit. 
C) earns accounting profits,but breaks even in economic terms. 
D) incurs an economic loss. 
E) makes a normal profit,but it cannot be determined whether or not it makes an accounting profit. 
A) makes a reasonable profit. 
B) makes an economic profit. 
C) earns accounting profits,but breaks even in economic terms. 
D) incurs an economic loss. 
E) makes a normal profit,but it cannot be determined whether or not it makes an accounting profit.

Question 6

Today,you might be buying from a regulated natural monopoly when you purchase

Accepted Answer

A) a car,a truck,or a bicycle. 
B) a computer,a phone,or a camera. 
C) natural gas or electricity. 
D) a house,a condominium,or a plot of land. 
E) food in a grocery store or in a restaurant. 
A) a car,a truck,or a bicycle. 
B) a computer,a phone,or a camera. 
C) natural gas or electricity. 
D) a house,a condominium,or a plot of land. 
E) food in a grocery store or in a restaurant.

Question 7

Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.

Accepted Answer

Marginal cost pricing sets the price equ

Question 8

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.What quantity will the Busy Bee produce to maximize its profit?

Accepted Answer

A) 20 hamburgers per hour 
B) 30 hamburgers per hour 
C) 50 hamburgers per hour 
D) 0 hamburgers per hour 
E) 10 hamburgers per hour 
A) 20 hamburgers per hour 
B) 30 hamburgers per hour 
C) 50 hamburgers per hour 
D) 0 hamburgers per hour 
E) 10 hamburgers per hour

Question 9

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the amount of food produced

Accepted Answer

A) remains constant. 
B) decreases. 
C) increases. 
D) might increase or decrease depending on whether the demand for food is elastic or inelastic. 
E) might increase or decrease depending on whether the monopoly's marginal revenue curve lies below or above its demand curve. 
A) remains constant. 
B) decreases. 
C) increases. 
D) might increase or decrease depending on whether the demand for food is elastic or inelastic. 
E) might increase or decrease depending on whether the monopoly's marginal revenue curve lies below or above its demand curve.

Question 10

If a firm successfully price discriminates,it increases
I.consumer surplus.
Ii.deadweight loss.
Iii.economic profit.

Accepted Answer

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

Question 11

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The amount of consumer surplus when the market has a monopoly producer is ________ and the amount of consumer surplus when the market is perfectly competitive is ________.

Accepted Answer

A) abf;ace 
B) abf;bcd 
C) ace;bcd 
D) ace;abf 
E) bcd;ace 
A) abf;ace 
B) abf;bcd 
C) ace;bcd 
D) ace;abf 
E) bcd;ace

Question 12

-The table above gives the demand for a monopolist's output.What is the marginal revenue when output is increased from 5 to 6 units?

Accepted Answer

A) $18 
B) $4 
C) $3 
D) -$2 
A) $18 
B) $4 
C) $3 
D) -$2

Question 13

A major characteristic of monopoly is that

Accepted Answer

A) no barriers to entry exist. 
B) the product is identical to that produced by other companies. 
C) a barrier to entry keeps out competitors. 
D) competition is intense. 
E) a few firms compete with each other. 
A) no barriers to entry exist. 
B) the product is identical to that produced by other companies. 
C) a barrier to entry keeps out competitors. 
D) competition is intense. 
E) a few firms compete with each other.

Question 14

Gene's Car Wash is a natural monopoly.To wash 100 cars a week,if Gene is unregulated,he would charge a price of $10.Gene's average total cost for washing 100 cars is $8,his average variable cost is $6,and his marginal cost is $4.If Gene is regulated using a marginal cost pricing rule,the price he is allowed to charge to wash 100 cars is

Accepted Answer

A) $10. 
B) $8. 
C) $6. 
D) $4. 
E) $400. 
A) $10. 
B) $8. 
C) $6. 
D) $4. 
E) $400.

Question 15

Which of the following is true regarding price discrimination?
I.It converts consumer surplus to economic profit.
Ii.A price discriminator must be a monopoly.
Iii.To be able to price discriminate,the firm must be able to identify different types of buyers.

Accepted Answer

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

Question 16

If a monopoly wants to sell a greater quantity of output,it must

Accepted Answer

A) lower its price. 
B) raise its price. 
C) tell consumers to buy more because it's a monopolist. 
D) raise its marginal cost. 
E) change its fixed costs. 
A) lower its price. 
B) raise its price. 
C) tell consumers to buy more because it's a monopolist. 
D) raise its marginal cost. 
E) change its fixed costs.

Question 17

To encourage invention and innovation,the government provides

Accepted Answer

A) patents. 
B) public franchises. 
C) government licenses. 
D) natural monopolies. 
E) easily obtained ownership barriers to entry. 
A) patents. 
B) public franchises. 
C) government licenses. 
D) natural monopolies. 
E) easily obtained ownership barriers to entry.

Question 18

Total revenue is equal to

Accepted Answer

A) the change in price resulting from a one-unit increase in quantity sold. 
B) the amount people will buy at a given price. 
C) the change in the quantity sold when you change the price by one unit. 
D) price multiplied by the quantity sold. 
E) the price at which the good or service is sold. 
A) the change in price resulting from a one-unit increase in quantity sold. 
B) the amount people will buy at a given price. 
C) the change in the quantity sold when you change the price by one unit. 
D) price multiplied by the quantity sold. 
E) the price at which the good or service is sold.

Question 19

If a natural monopoly is regulated using the marginal cost pricing rule,how will that affect prices,outputs,profits,and the distribution of surpluses? What are the pros and cons to this method of regulation?

Accepted Answer

The marginal cost pricing rule sets the

Question 20

Assume someone organizes all farms in the nation into a single-price monopoly.What is the monopoly's marginal revenue curve?

Accepted Answer

A) It is a horizontal line at the competitive industry's price. 
B) It is a line that lies below the new monopoly's demand curve. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is identical to the demand curve for the monopolist's output. 
E) It is a line that lies above the new monopoly's demand curve. 
A) It is a horizontal line at the competitive industry's price. 
B) It is a line that lies below the new monopoly's demand curve. 
C) It is a vertical line at the monopoly's chosen output level. 
D) It is identical to the demand curve for the monopolist's output. 
E) It is a line that lies above the new monopoly's demand curve.

If a perfectly competitive industry is taken over by a single firm that operates as a single-price monopoly,the price will and the quantity will .

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is perfectly competitive,the quantity of steak is

The above figure shows a market. -If the market in the figure above is a profit-maximizing single-price monopoly,the deadweight loss is the area ________.

If a single-price monopoly is making a large economic profit,what keeps other firms from competing away the profit?

Under a marginal cost pricing rule,a natural monopoly

Today,you might be buying from a regulated natural monopoly when you purchase

Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.What quantity will the Busy Bee produce to maximize its profit?

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the amount of food produced

If a firm successfully price discriminates,it increases I.consumer surplus. Ii.deadweight loss. Iii.economic profit.

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The amount of consumer surplus when the market has a monopoly producer is and the amount of consumer surplus when the market is perfectly competitive is .

-The table above gives the demand for a monopolist's output.What is the marginal revenue when output is increased from 5 to 6 units?

A major characteristic of monopoly is that

Which of the following is true regarding price discrimination? I.It converts consumer surplus to economic profit. Ii.A price discriminator must be a monopoly. Iii.To be able to price discriminate,the firm must be able to identify different types of buyers.

If a monopoly wants to sell a greater quantity of output,it must

To encourage invention and innovation,the government provides

Total revenue is equal to

If a natural monopoly is regulated using the marginal cost pricing rule,how will that affect prices,outputs,profits,and the distribution of surpluses? What are the pros and cons to this method of regulation?

Assume someone organizes all farms in the nation into a single-price monopoly.What is the monopoly's marginal revenue curve?

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

If a perfectly competitive industry is taken over by a single firm that operates as a single-price monopoly,the price will ________ and the quantity will ________.

-Suppose the grocery store market in Kansas City is perfectly competitive.Then one store buys all the others and becomes a single-price monopoly.The figure above shows the relevant demand and cost curves.When the market is perfectly competitive,the quantity of steak is

The above figure shows a market. -If the market in the figure above is a profit-maximizing single-price monopoly,the deadweight loss is the area ________.

If a single-price monopoly is making a large economic profit,what keeps other firms from competing away the profit?

Under a marginal cost pricing rule,a natural monopoly

Today,you might be buying from a regulated natural monopoly when you purchase

Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.

-Suppose the Busy Bee Café is the monopoly producer of hamburgers in Hugo,Oklahoma.The above figure represents the demand,marginal revenue,and marginal cost curves for this establishment.What quantity will the Busy Bee produce to maximize its profit?

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the amount of food produced

If a firm successfully price discriminates,it increases I.consumer surplus. Ii.deadweight loss. Iii.economic profit.

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The amount of consumer surplus when the market has a monopoly producer is ________ and the amount of consumer surplus when the market is perfectly competitive is ________.

-The table above gives the demand for a monopolist's output.What is the marginal revenue when output is increased from 5 to 6 units?

A major characteristic of monopoly is that

Which of the following is true regarding price discrimination? I.It converts consumer surplus to economic profit. Ii.A price discriminator must be a monopoly. Iii.To be able to price discriminate,the firm must be able to identify different types of buyers.

If a monopoly wants to sell a greater quantity of output,it must

To encourage invention and innovation,the government provides

Total revenue is equal to

If a natural monopoly is regulated using the marginal cost pricing rule,how will that affect prices,outputs,profits,and the distribution of surpluses? What are the pros and cons to this method of regulation?

Assume someone organizes all farms in the nation into a single-price monopoly.What is the monopoly's marginal revenue curve?

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

If a perfectly competitive industry is taken over by a single firm that operates as a single-price monopoly,the price will and the quantity will .

-The figure above shows the demand curve,marginal revenue curve,and marginal cost curve.The amount of consumer surplus when the market has a monopoly producer is and the amount of consumer surplus when the market is perfectly competitive is .