Question 1

For the output maximizing monopolist

Accepted Answer

A)  average total cost must be falling.
B)  marginal revenue equals marginal cost.
C)  long-run marginal cost equals demand.
D)  price equals average total cost. D

Question 2

A firm facing the demand curve P = 10 - Q has zero marginal costs, fixed costs of 12, and is a single price monopolist. What quantity would it produce and what would its profit (loss) situation then be?

Accepted Answer

Quantity and Price a...

Question 3

I frequently buy something which then has a rebate offer attached. I must fill in all the information requested, send off the form and then wait 8 weeks for the rebate. This practice is referred to as

Accepted Answer

A)  the hurdle model of price discrimination.
B)  exclusive contracting.
C)  a profit maximizing markup.
D)  network economics.

Question 4

Under rate of return regulation, firms earn

Accepted Answer

A)  positive economic profits.
B)  negative economic profits.
C)  zero economic profits.
D)  zero accounting profits.

Question 5

Which is true of a single price monopoly firm?

Accepted Answer

A)  Its supply curve is equal to its marginal cost function.
B)  It creates more welfare loss to society than a perfect price discriminating monopolist.
C)  Its shutdown point is where ATC = price.
D)  An increased profits tax will lower the quantity the firm will produce.

Question 6

According to the text, the most important of the five factors which give rise to monopoly is

Accepted Answer

A)  exclusive control over important inputs.
B)  economies of scale.
C)  patents.
D)  government licenses.
E)  network economies. B

Question 7

Which of the following explains why theater prices for popcorn are three or four times higher than the popcorn price in the grocery store?

Accepted Answer

A)  The grocery store sells a much higher volume and gets its profits that way.
B)  The cost of popping the popcorn is high.
C)  Grocery stores are satisfied with normal profit while theaters seek economic profit.
D)  The demand curve for popcorn in a theater is more inelastic than the demand for popcorn at the grocery store.

Question 8

In the diagram below, the profit maximizing output level is

Accepted Answer

A)  0A.
B)  0B.
C)  0C.
D)  It is impossible to say.

Question 9

The supply curve for a monopolist

Accepted Answer

A)  is upward sloping.
B)  is vertical.
C)  does not exist.
D)  is downward sloping.

Question 10

Suppose you own a firm that produces widgets and is a monopoly. The market demand is given by the equation P = 100 - 2Q, where P is the price of gadgets and Q is the quantity of gadgets sold per week. The firm's marginal costs are given by the equation MC = 16Q. When the monopolist maximizes profits the price elasticity of demand for widgets is

Accepted Answer

A)  9.
B)  36.
C)  0.5.
D)  0.02.

Question 11

If a firm could perfectly price discriminate,

Accepted Answer

A)  the marginal revenue curve would be the same as the demand curve.
B)  the marginal revenue curve would lie below the demand curve.
C)  the marginal revenue curve would lie above the demand curve.
D)  there would be no marginal revenue function.

Question 12

A natural monopoly always has

Accepted Answer

A)  a downward sloping long run average cost curve.
B)  a downward sloping marginal cost curve.
C)  its profit maximization point where price = marginal cost.
D)  patent rights.

Question 13

The demand equation for a single price monopolist is P = 120 - 3Q. The marginal revenue curve for this monopolist is

Accepted Answer

A)  120 - 1.5Q.
B)  60 - 3Q.
C)  60 - 6Q.
D)  120 - 6Q.

Question 14

Monopoly is characterized by

Accepted Answer

A)  many close substitutes.
B)  no barriers to entry.
C)  a downward sloping demand curve.
D)  a horizontal demand curve.

Question 15

A profit maximizing monopolist sets output where

Accepted Answer

A)  MC = MR.
B)  MC = P.
C)  MC = demand.
D)  it depends on the average costs in each case.

Question 16

If the owner of the firm, shown above is a profit maximizer, the firm should ______ in the short run.

Accepted Answer

A)  continue to operate at the existing output
B)  shutdown
C)  expand output to lower costs
D)  More data is needed to say definitively what the firm should do.

Question 17

The total revenue curve for a firm is given by TR = 2Q.

Accepted Answer

A)  The firm is definitely a monopolist.
B)  The firm is definitely not a monopolist.
C)  The firm may be a monopolist or a perfectly competitive firm.
D)  One cannot tell from the equation what market form applies.

Question 18

A single price monopoly that faces the demand curve P = 10 - Q and profit maximizes by reducing price from $6 to $5 must have a marginal cost of

Accepted Answer

A)  1.
B)  5.
C)  6.
D)  10. A

Question 19

A monopolist has a marginal revenue curve given by MR = 102 - Q, and a total cost curve given by TC = Q2 + 16. The monopolist's profit maximizing price and quantity are _______, _____ respectively.

Accepted Answer

A)  85; 34
B)  52; 50
C)  100; 2
D)  77; 50

Question 20

A single price profit maximizing monopolist is inefficient because

Accepted Answer

A)  it produces too much output.
B)  it perfectly price discriminates when it can.
C)  the sum of consumer and producer surplus is less than it could be.
D)  it produces where price equals marginal cost rather than where marginal cost equals marginal revenue.

Exam 11: Monopoly

For the output maximizing monopolist

Correct Answer
verified
D

A firm facing the demand curve P = 10 - Q has zero marginal costs, fixed costs of 12, and is a single price monopolist. What quantity would it produce and what would its profit (loss) situation then be?

Correct Answer
verified
Quantity and Price a...
View Answer

I frequently buy something which then has a rebate offer attached. I must fill in all the information requested, send off the form and then wait 8 weeks for the rebate. This practice is referred to as

Correct Answer
verified

Under rate of return regulation, firms earn

Correct Answer
verified

Which is true of a single price monopoly firm?

Correct Answer
verified

According to the text, the most important of the five factors which give rise to monopoly is

Correct Answer
verified
B

Which of the following explains why theater prices for popcorn are three or four times higher than the popcorn price in the grocery store?

Correct Answer
verified

In the diagram below, the profit maximizing output level is

Correct Answer
verified

The supply curve for a monopolist

Correct Answer
verified

Correct Answer
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If a firm could perfectly price discriminate,

Correct Answer
verified

A natural monopoly always has

Correct Answer
verified

The demand equation for a single price monopolist is P = 120 - 3Q. The marginal revenue curve for this monopolist is

Correct Answer
verified

Monopoly is characterized by

Correct Answer
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A profit maximizing monopolist sets output where

Correct Answer
verified

If the owner of the firm, shown above is a profit maximizer, the firm should ______ in the short run.

Correct Answer
verified

The total revenue curve for a firm is given by TR = 2Q.

Correct Answer
verified

A single price monopoly that faces the demand curve P = 10 - Q and profit maximizes by reducing price from $6 to $5 must have a marginal cost of

Correct Answer
verified
A

A monopolist has a marginal revenue curve given by MR = 102 - Q, and a total cost curve given by TC = Q2 + 16. The monopolist's profit maximizing price and quantity are ___, _ respectively.

Correct Answer
verified

A single price profit maximizing monopolist is inefficient because

Correct Answer
verified

Exam 11: Monopoly

For the output maximizing monopolist

Correct AnswerverifiedD

A firm facing the demand curve P = 10 - Q has zero marginal costs, fixed costs of 12, and is a single price monopolist. What quantity would it produce and what would its profit (loss) situation then be?

Correct AnswerverifiedQuantity and Price a...View AnswerShow Answer

I frequently buy something which then has a rebate offer attached. I must fill in all the information requested, send off the form and then wait 8 weeks for the rebate. This practice is referred to as

Correct AnswerverifiedShow Answer

Under rate of return regulation, firms earn

Correct AnswerverifiedShow Answer

Which is true of a single price monopoly firm?

Correct AnswerverifiedShow Answer

According to the text, the most important of the five factors which give rise to monopoly is

Correct AnswerverifiedB

Which of the following explains why theater prices for popcorn are three or four times higher than the popcorn price in the grocery store?

Correct AnswerverifiedShow Answer

In the diagram below, the profit maximizing output level is

Correct AnswerverifiedShow Answer

The supply curve for a monopolist

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a firm could perfectly price discriminate,

Correct AnswerverifiedShow Answer

A natural monopoly always has

Correct AnswerverifiedShow Answer

The demand equation for a single price monopolist is P = 120 - 3Q. The marginal revenue curve for this monopolist is

Correct AnswerverifiedShow Answer

Monopoly is characterized by

Correct AnswerverifiedShow Answer

A profit maximizing monopolist sets output where

Correct AnswerverifiedShow Answer

If the owner of the firm, shown above is a profit maximizer, the firm should ______ in the short run.

Correct AnswerverifiedShow Answer

The total revenue curve for a firm is given by TR = 2Q.

Correct AnswerverifiedShow Answer

A single price monopoly that faces the demand curve P = 10 - Q and profit maximizes by reducing price from $6 to $5 must have a marginal cost of

Correct AnswerverifiedA

A monopolist has a marginal revenue curve given by MR = 102 - Q, and a total cost curve given by TC = Q2 + 16. The monopolist's profit maximizing price and quantity are _______, _____ respectively.

Correct AnswerverifiedShow Answer

A single price profit maximizing monopolist is inefficient because

Correct AnswerverifiedShow Answer

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D

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Quantity and Price a...
View Answer

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B

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A

A monopolist has a marginal revenue curve given by MR = 102 - Q, and a total cost curve given by TC = Q2 + 16. The monopolist's profit maximizing price and quantity are ___, _ respectively.

Correct Answer
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Correct Answer
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