Question 1

A monopoly is an inefficient way to produce a product because

Accepted Answer

A)   it can earn both short-run and long-run profits.
B)   it faces a downward-sloping demand curve.
C)   the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers.
D)   it produces a smaller level of output than would be produced in a competitive market.E) C) and D)
F) B) and D)

Question 2

A natural monopoly has economies of scale for most if not all of its range of output.

Accepted Answer

A) True 
 B)False

Question 3

Figure 15-25 
-Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

Accepted Answer

The answer of Figure 15-25 
-Refer to Figure 15-25. If...

Question 4

For a monopoly,

Accepted Answer

A)   average revenue exceeds marginal revenue.
B)   average revenue equals marginal revenue.
C)   average revenue is less than marginal revenue.
D)   price equals marginal revenue.E) None of the above
F) B) and C)

Question 5

Table 15-9
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 15-9. What is the marginal cost of the 4th unit?

Accepted Answer

A)   $4
B)   $14
C)   $31
D)   $62E) A) and C)
F) All of the above

Question 6

A monopolist's profit is equal to Price - Marginal Cost) × Quantity.

Accepted Answer

A) True 
 B)False

Question 7

Price discrimination explains why Ivy League universities often base tuition costs on students'

Accepted Answer

A)   age.
B)   financial resources.
C)   high school GPA.
D)   gender.E) All of the above
F) C) and D)

Question 8

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) None of the above
F) C) and D)

Question 9

Patent and copyright laws encourage

Accepted Answer

A)   creative activity.
B)   lower prices due to decreasing average total costs.
C)   competition among firms.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 10

A monopolist faces the following demand curve:  The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Accepted Answer

A)   400
B)   500
C)   900
D)   4,200E) None of the above
F) A) and D)

Question 11

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Accepted Answer

A)   can prevent children from buying the lower-priced tickets and selling them to adults.
B)   has some degree of monopoly pricing power.
C)   can easily distinguish between the two groups of customers.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 12

The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

Accepted Answer

A)   price segregation.
B)   price discrimination.
C)   arbitrage.
D)   monopoly pricing.E) All of the above
F) A) and C)

Question 13

Which of the following is not a characteristic of a monopoly?

Accepted Answer

A)   the seller has market power
B)   one seller
C)   free entry and exit
D)   a product without close substitutesE) B) and C)
F) All of the above

Question 14

Table 15-20
A monopolist faces the following demand curve:
 
-Refer to Table 15-20. If a monopolist faces a constant marginal cost of $20, 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 unitsE) B) and C)
F) A) and C)

Question 15

Figure 15-1 
-Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Accepted Answer

A)   economies of scale.
B)   diseconomies of scale.
C)   diminishing marginal product.
D)   increasing marginal cost.E) C) and D)
F) A) and D)

Question 16

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A)   quantity supplied.
B)   supply price.
C)   deadweight loss.
D)   producer surplus.E) A) and B)
F) A) and C)

Question 17

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

Accepted Answer

A)   $200
B)   $400
C)   $600
D)   $800E) A) and C)
F) C) and D)

Question 18

Table 15-1
 
-Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Accepted Answer

A)   $3
B)   $5
C)   $11
D)   $17E) B) and C)
F) None of the above

Question 19

A benefit of a monopoly is

Accepted Answer

A)   lower prices.
B)   a wide variety of similar products.
C)   decreasing long-run average total costs.
D)   greater creativity by authors who can copyright their novels.E) All of the above
F) B) and D)

Question 20

Which of the following statements is are)  true of a monopoly? i)  A monopoly has the ability to set the price of its product at whatever level it desires.
Ii)  A monopoly's total revenue will always increase when it increases the price of its product.
Iii)  The more a monopoly increases output, the higher the profits.

Accepted Answer

A)   i)  only
B)   ii)  only
C)   i)  and ii)  only
D)   ii)  and iii)  onlyE) A) and D)
F) None of the above

Exam 14: Monopoly

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

Correct Answer
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For a monopoly,

Correct Answer
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If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

Correct Answer
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Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Correct Answer
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A natural monopoly has economies of scale for most if not all of its range of output.

Correct Answer
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Correct Answer
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Price discrimination explains why Ivy League universities often base tuition costs on students'

Correct Answer
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A monopoly is an inefficient way to produce a product because

Correct Answer
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A benefit of a monopoly is

Correct Answer
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Figure 15-25 -Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

Correct Answer
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The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

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 is the marginal cost of the 4th unit?

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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Which of the following is not a characteristic of a monopoly?

Correct Answer
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Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Correct Answer
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A monopolist's profit is equal to Price - Marginal Cost) × Quantity.

Correct Answer
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A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Correct Answer
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Patent and copyright laws encourage

Correct Answer
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The amount that producers receive for a good minus their costs of producing it equals

Correct Answer
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A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Correct Answer
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Exam 14: Monopoly

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

Correct AnswerverifiedShow Answer

For a monopoly,

Correct AnswerverifiedShow Answer

If a monopolist sells 100 units at $8 per unit and realizes an average total cost of $6 per unit, what is the monopolist's profit?

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Correct AnswerverifiedShow Answer

A natural monopoly has economies of scale for most if not all of its range of output.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Price discrimination explains why Ivy League universities often base tuition costs on students'

Correct AnswerverifiedShow Answer

A monopoly is an inefficient way to produce a product because

Correct AnswerverifiedShow Answer

A benefit of a monopoly is

Correct AnswerverifiedShow Answer

Figure 15-25 -Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

Correct AnswerverifiedShow Answer

The practice of selling the same goods to different customers at different prices, but with the same marginal cost, is known as

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a characteristic of a monopoly?

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Correct AnswerverifiedShow Answer

A monopolist's profit is equal to Price - Marginal Cost) × Quantity.

Correct AnswerverifiedShow Answer

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Correct AnswerverifiedShow Answer

Patent and copyright laws encourage

Correct AnswerverifiedShow Answer

The amount that producers receive for a good minus their costs of producing it equals

Correct AnswerverifiedShow Answer

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Correct AnswerverifiedShow Answer

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