Question 1

When a firm experiences continually declining average total costs,

Accepted Answer

A)  the firm is a price taker.
B)  society is better served by having one firm supply the product.
C)  the firm will earn higher profits than if average total costs are increasing.
D)  All of the above are correct.E) A) and C)
F) None of the above

Question 2

Figure 15-12 
-Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Accepted Answer

A)  A+B
B)  C+F
C)  G
D)  A+B+C+FE) A) and D)
F) B) and C)

Question 3

A profit-maximizing monopolist charges a price of $14. The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7. What is the monopolist's profit?

Accepted Answer

A)  $90
B)  $105
C)  $180
D)  Not enough information is given to determine the answer.E) B) and C)
F) B) and D)

Question 4

Since a monopolist faces a downward sloping demand curve,

Accepted Answer

A)  ​the monopolist is able to sell all that it wants at whatever price the monopolist chooses.
B)  ​it is necessary for the monopolist to lower the price to sell additional units of the good.
C)  ​the monopolist sells only a fraction of the total sales of the good in the market.
D)  ​the monopolist must always make an economic profit.E) B) and D)
F) B) and C)

Question 5

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.E) A) and D)
F) A) and C)

Question 6

One problem with regulating a monopolist on the basis of cost is that

Accepted Answer

A)  by focusing on costs, the regulators ignore profits.
B)  it does not provide an incentive for the monopolist to reduce its cost.
C)  a monopolist's costs, by definition, are higher than costs of perfectly competitive firms.
D)  a monopolist is still able to generate excessive economic profits.E) All of the above
F) A) and C)

Question 7

Price discrimination

Accepted Answer

A)  forces monopolies to charge a lower price as a result of government regulation.
B)  is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price.
C)  is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices.
D)  increases the consumer surplus associated with a monopolistic market.E) None of the above
F) All of the above

Question 8

Which of the following is not a reason for the existence of a monopoly?

Accepted Answer

A)  patents
B)  marginal-cost pricing
C)  economies of scale
D)  trademarksE) A) and B)
F) A) and C)

Question 9

Table 15-9
Consider the following demand and cost information for a monopoly. 
-Refer to Table 15-9. What price should the monopoly charge to maximize profit?

Accepted Answer

A)  $16
B)  $20
C)  $24
D)  $28E) A) and D)
F) C) and D)

Question 10

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information. 
-Refer to Table 15-7. What is the total revenue from selling 8 pairs of shoes?

Accepted Answer

A)  $90
B)  $695
C)  $720
D)  $800E) A) and B)
F) B) and C)

Question 11

In a market characterized by monopoly, the market demand curve is

Accepted Answer

A)  upward sloping.
B)  horizontal.
C)  downward sloping.
D)  vertical.E) A) and C)
F) All of the above

Question 12

What happens to the price and quantity sold of a drug when its patent runs out? (i) 
The price will fall.
(ii) 
The quantity sold will fall.
(iii) 
The marginal cost of producing the drug will rise.

Accepted Answer

A)  (i)  only
B)  (i)  and (ii)  only
C)  (ii)  and (iii)  only
D)  (i) , (ii) , and (iii) E) None of the above
F) All of the above

Question 13

The key issue in determining the efficiency of public versus private ownership of a monopoly is

Accepted Answer

A)  the tendency for efficient management of publicly owned enterprises.
B)  the inability of private monopolies to get rid of managers that are doing a bad job.
C)  the propensity of private monopolies to generate excessive profits.
D)  how ownership of the firm affects the cost of production.E) A) and B)
F) B) and D)

Question 14

Competitive firms have

Accepted Answer

A)  downward-sloping demand curves, and they can sell as much output as they desire at the market price.
B)  downward-sloping demand curves, and they can sell only a limited quantity of output at each price.
C)  horizontal demand curves, and they can sell as much output as they desire at the market price.
D)  horizontal demand curves, and they can sell only a limited quantity of output at each price.E) B) and D)
F) B) and C)

Question 15

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 8th tie?

Accepted Answer

A)  $45
B)  $60
C)  $80
D)  $95E) A) and D)
F) A) and C)

Question 16

What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10. The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and marginal revenue is $5. The socially efficient level of production is 110 units. The demand curve is linear and downward sloping, and the marginal cost curve is constant.

Accepted Answer

1/2*(110-1...

Question 17

For a typical natural monopoly, average total cost is

Accepted Answer

A)  falling, and marginal cost is above average total cost.
B)  falling, and marginal cost is below average total cost.
C)  rising, and marginal cost is below average total cost.
D)  rising, and marginal cost is above average total cost.E) None of the above
F) A) and D)

Question 18

Figure 15-1 
-Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm

Accepted Answer

A)  must lie entirely above the average total cost curve.
B)  must lie entirely below the average total cost curve.
C)  must be upward sloping.
D)  does not exist.E) B) and D)
F) None of the above

Question 19

Barriers to entry only exist for monopoly markets.

Accepted Answer

A) True 
 B)False

Question 20

Without price discrimination, the monopolist sells every unit at the same price. As a consequence,

Accepted Answer

A)  marginal revenue is equal to price.
B)  marginal revenue is equal to average revenue.
C)  price is greater than marginal revenue.
D)  Both a and b are correct.E) None of the above
F) C) and D)

Exam 15: Monopoly

In a market characterized by monopoly, the market demand curve is

Correct Answer
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A profit-maximizing monopolist charges a price of $14. The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7. What is the monopolist's profit?

Correct Answer
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Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the total revenue from selling 8 pairs of shoes?

Correct Answer
verified

Correct Answer
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One problem with regulating a monopolist on the basis of cost is that

Correct Answer
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What happens to the price and quantity sold of a drug when its patent runs out? (i) The price will fall. (ii) The quantity sold will fall. (iii) The marginal cost of producing the drug will rise.

Correct Answer
verified

For a typical natural monopoly, average total cost is

Correct Answer
verified

Barriers to entry only exist for monopoly markets.

Correct Answer
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The key issue in determining the efficiency of public versus private ownership of a monopoly is

Correct Answer
verified

Without price discrimination, the monopolist sells every unit at the same price. As a consequence,

Correct Answer
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When a firm experiences continually declining average total costs,

Correct Answer
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Competitive firms have

Correct Answer
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A firm cannot price discriminate if it

Correct Answer
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Figure 15-1 -Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm

Correct Answer
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Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What price should the monopoly charge to maximize profit?

Correct Answer
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Price discrimination

Correct Answer
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Figure 15-12 -Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

Correct Answer
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Since a monopolist faces a downward sloping demand curve,

Correct Answer
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Which of the following is not a reason for the existence of a monopoly?

Correct Answer
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1/2*(110-1...
View Answer

Exam 15: Monopoly

In a market characterized by monopoly, the market demand curve is

Correct AnswerverifiedShow Answer

A profit-maximizing monopolist charges a price of $14. The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7. What is the monopolist's profit?

Correct AnswerverifiedShow Answer

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the total revenue from selling 8 pairs of shoes?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One problem with regulating a monopolist on the basis of cost is that

Correct AnswerverifiedShow Answer

What happens to the price and quantity sold of a drug when its patent runs out? (i) The price will fall. (ii) The quantity sold will fall. (iii) The marginal cost of producing the drug will rise.

Correct AnswerverifiedShow Answer

For a typical natural monopoly, average total cost is

Correct AnswerverifiedShow Answer

Barriers to entry only exist for monopoly markets.

Correct AnswerverifiedShow Answer

The key issue in determining the efficiency of public versus private ownership of a monopoly is

Correct AnswerverifiedShow Answer

Without price discrimination, the monopolist sells every unit at the same price. As a consequence,

Correct AnswerverifiedShow Answer

When a firm experiences continually declining average total costs,

Correct AnswerverifiedShow Answer

Competitive firms have

Correct AnswerverifiedShow Answer

A firm cannot price discriminate if it

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What price should the monopoly charge to maximize profit?

Correct AnswerverifiedShow Answer

Price discrimination

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Figure 15-12 -Refer to Figure 15-12. Which area represents the deadweight loss from monopoly?

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Since a monopolist faces a downward sloping demand curve,

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Which of the following is not a reason for the existence of a monopoly?

Correct AnswerverifiedShow Answer

Correct Answerverified1/2*(110-1...View AnswerShow Answer

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1/2*(110-1...
View Answer