Question 1

When a monopolist increases the number of units it sells,there are two effects on revenue.They are the

Accepted Answer

A)   demand effect and the supply effect.
B)   competition effect and the cost effect.
C)   competitive effect and the monopoly effect.
D)   output effect and the price effect.

Question 2

A perfectly competitive market

Accepted Answer

A)   may not be in the best interests of society,whereas a monopoly market promotes general economic well-being
B)   promotes general economic well-being,whereas a monopoly market may not be in the best interests of society.
C)   and a monopoly market are equally likely to promote general economic well-being.
D)   is less likely to promote general economic well-being than a monopoly market.

Question 3

A monopolist produces

Accepted Answer

A)   more than the socially efficient quantity of output but at a higher price than in a competitive market.
B)   less than the socially efficient quantity of output but at a higher price than in a competitive market.
C)   the socially efficient quantity of output but at a higher price than in a competitive market.
D)   possibly more or possibly less than the socially efficient quantity of output,but definitely at a higher price than in a competitive market.

Question 4

A monopolist can sell 200 units of output for $36 per unit.Alternatively,it can sell 201 units of output for $35.80 per unit.The marginal revenue of the 201st unit of output is

Accepted Answer

A)   $-4.20.
B)   $-0.20.
C)   $4.20.
D)   $35.80.

Question 5

Splitting up a monopoly is often justified on the grounds that

Accepted Answer

A)   consumers prefer dealing with small firms.
B)   small firms have lower costs.
C)   competition is inherently efficient.
D)   small firms produce higher quality products.

Question 6

Figure 14-4 
-Refer to Figure 14-4.A profit-maximizing monopoly will charge a price of

Accepted Answer

A)   P5.
B)   P4.
C)   P3.
D)   P2.

Question 7

University financial aid can be viewed as a type of price discrimination.

Accepted Answer

A) True 
 B)False

Question 8

A profit-maximizing monopolist charges a price of $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.What is the monopolist's profit?

Accepted Answer

A)   $60
B)   $70
C)   $100
D)   $120

Question 9

Figure 14-2    
-Refer to Figure 14-2.Which panel could represent the demand curve facing the soybean industry?

Accepted Answer

A)   Panel A
B)   Panel B
C)   Panel C
D)   Panel D

Question 10

When a firm operates under conditions of monopoly,its price is

Accepted Answer

A)   not constrained.
B)   constrained by marginal cost.
C)   constrained by demand.
D)   constrained only by its social agenda.

Question 11

Which of the following statements is not correct?

Accepted Answer

A)   The government may use antitrust laws to prevent a merger if the government believes the merger will reduce competition and increase prices.
B)   By regulating a natural monopoly where price equals average total cost,the monopoly earns zero profits.
C)   An advantage of private ownership over public ownership is that private business owners tend to fire inefficient managers.
D)   The government should always intervene to improve monopoly inefficiency.

Question 12

Figure 14-6 
-Refer to Figure 14-6.A profit-maximizing monopolist would incur total costs of

Accepted Answer

A)   $81.
B)   $120.
C)   $144.
D)   $240.

Question 13

An industry is a natural monopoly when (i) the government assists the firm in maintaining the monopoly.
(ii) a single firm owns a key resource.
(iii) a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Accepted Answer

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

Question 14

Consider a profit-maximizing monopoly pricing under the following conditions.The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.The socially efficient level of production is 12 units.The demand curve and marginal cost curves are linear.What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)   $4
B)   $6
C)   $12
D)   $16

Question 15

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Accepted Answer

A)   false; price increases will mean fewer sales,which may lower profits.
B)   true; this is the primary reason why economists believe that monopolies result in economic inefficiency.
C)   false; the monopolist is a price taker.
D)   true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices.

Question 16

Firms with substantial monopoly power are quite common because many goods are unique.

Accepted Answer

A) True 
 B)False

Question 17

When a monopolist decreases the price of its good,consumers

Accepted Answer

A)   continue to buy the same amount.
B)   buy more.
C)   buy less.
D)   may buy more or less,depending on the price elasticity of demand.

Question 18

A monopoly firm can sell 150 units of output for $10 per unit.Alternatively,it can sell 151 units of output for $9.95 per unit.The marginal revenue of the 151st unit of output is

Accepted Answer

A)   $-2.45.
B)   $-0.05.
C)   $2.45.
D)   $9.95.

Question 19

The first major piece of antitrust legislation was the

Accepted Answer

A)   Clayton Act.
B)   Reagan-Bush Act.
C)   Sherman Act.
D)   Clinton-Gore Act.

Question 20

Suppose when a monopolist produces 50 units its average revenue is $8 per unit,its marginal revenue is $4 per unit,its marginal cost is $4 per unit,and its average total cost is $3 per unit.What can we conclude about this monopolist?

Accepted Answer

A)   The monopolist is currently maximizing profits,and its total profits are $200.
B)   The monopolist is currently maximizing profits,and its total profits are $250.
C)   The monopolist is not currently maximizing its profits; it should produce more units and charge a lower price to maximize profit.
D)   The monopolist is not currently maximizing its profits; it should produce fewer units and charger a higher price to maximize profit.

Exam 14: Monopoly

When a firm operates under conditions of monopoly,its price is

Correct Answer
verified

An industry is a natural monopoly when (i) the government assists the firm in maintaining the monopoly. (ii) a single firm owns a key resource. (iii) a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Correct Answer
verified

A monopolist can sell 200 units of output for $36 per unit.Alternatively,it can sell 201 units of output for $35.80 per unit.The marginal revenue of the 201^st unit of output is

Correct Answer
verified

Figure 14-4 -Refer to Figure 14-4.A profit-maximizing monopoly will charge a price of

Correct Answer
verified

University financial aid can be viewed as a type of price discrimination.

Correct Answer
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When a monopolist increases the number of units it sells,there are two effects on revenue.They are the

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
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When a monopolist decreases the price of its good,consumers

Correct Answer
verified

Splitting up a monopoly is often justified on the grounds that

Correct Answer
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Figure 14-6 -Refer to Figure 14-6.A profit-maximizing monopolist would incur total costs of

Correct Answer
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Correct Answer
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Figure 14-2 -Refer to Figure 14-2.Which panel could represent the demand curve facing the soybean industry?

Correct Answer
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Suppose when a monopolist produces 50 units its average revenue is $8 per unit,its marginal revenue is $4 per unit,its marginal cost is $4 per unit,and its average total cost is $3 per unit.What can we conclude about this monopolist?

Correct Answer
verified

The first major piece of antitrust legislation was the

Correct Answer
verified

A monopolist produces

Correct Answer
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A perfectly competitive market

Correct Answer
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Firms with substantial monopoly power are quite common because many goods are unique.

Correct Answer
verified

A monopoly firm can sell 150 units of output for $10 per unit.Alternatively,it can sell 151 units of output for $9.95 per unit.The marginal revenue of the 151^st unit of output is

Correct Answer
verified

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Correct Answer
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A profit-maximizing monopolist charges a price of $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.What is the monopolist's profit?

Correct Answer
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Exam 14: Monopoly

When a firm operates under conditions of monopoly,its price is

Correct AnswerverifiedShow Answer

An industry is a natural monopoly when (i) the government assists the firm in maintaining the monopoly. (ii) a single firm owns a key resource. (iii) a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Correct AnswerverifiedShow Answer

A monopolist can sell 200 units of output for $36 per unit.Alternatively,it can sell 201 units of output for $35.80 per unit.The marginal revenue of the 201st unit of output is

Correct AnswerverifiedShow Answer

Figure 14-4 -Refer to Figure 14-4.A profit-maximizing monopoly will charge a price of

Correct AnswerverifiedShow Answer

University financial aid can be viewed as a type of price discrimination.

Correct AnswerverifiedShow Answer

When a monopolist increases the number of units it sells,there are two effects on revenue.They are the

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

When a monopolist decreases the price of its good,consumers

Correct AnswerverifiedShow Answer

Splitting up a monopoly is often justified on the grounds that

Correct AnswerverifiedShow Answer

Figure 14-6 -Refer to Figure 14-6.A profit-maximizing monopolist would incur total costs of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 14-2 -Refer to Figure 14-2.Which panel could represent the demand curve facing the soybean industry?

Correct AnswerverifiedShow Answer

Suppose when a monopolist produces 50 units its average revenue is $8 per unit,its marginal revenue is $4 per unit,its marginal cost is $4 per unit,and its average total cost is $3 per unit.What can we conclude about this monopolist?

Correct AnswerverifiedShow Answer

The first major piece of antitrust legislation was the

Correct AnswerverifiedShow Answer

A monopolist produces

Correct AnswerverifiedShow Answer

A perfectly competitive market

Correct AnswerverifiedShow Answer

Firms with substantial monopoly power are quite common because many goods are unique.

Correct AnswerverifiedShow Answer

A monopoly firm can sell 150 units of output for $10 per unit.Alternatively,it can sell 151 units of output for $9.95 per unit.The marginal revenue of the 151st unit of output is

Correct AnswerverifiedShow Answer

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Correct AnswerverifiedShow Answer

A profit-maximizing monopolist charges a price of $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.What is the monopolist's profit?

Correct AnswerverifiedShow Answer

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A monopolist can sell 200 units of output for $36 per unit.Alternatively,it can sell 201 units of output for $35.80 per unit.The marginal revenue of the 201^st unit of output is

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A monopoly firm can sell 150 units of output for $10 per unit.Alternatively,it can sell 151 units of output for $9.95 per unit.The marginal revenue of the 151^st unit of output is

Correct Answer
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