Question 1

Use the figure below to answer the following questions.
  
Figure 13.4.4
-Refer to Figure 13.4.4.Consider a market with a monopoly that distinguishes between two groups of buyers.If the light grey area shows the consumer surplus and the dark grey area shows the producer surplus,which graphs correctly represents this firm?

Accepted Answer

A)  (a) 
B)  (b) 
C)  (c) 
D)  (d) 
E)  (b) and (d) F) A) and C)
G) C) and E)

Question 2

Use the figure below to answer the following questions.
  
Figure 13.2.3
-Refer to Figure 13.2.3.Assume this firm is a single-price monopoly.How many tickets does this monopolist sell to maximize economic profit?

Accepted Answer

A)  20 tickets
B)  30 tickets
C)  50 tickets
D)  60 tickets
E)  100 ticketsF) C) and D)
G) C) and E)

Question 3

The more perfectly a monopoly can price discriminate,the

Accepted Answer

A)  smaller its output and the lower its profit.
B)  smaller its output and the higher its profit.
C)  larger its output and the lower its profit.
D)  larger its output and the higher its profit.
E)  none of the above.F) B) and E)
G) C) and E)

Question 4

Use the figure below to answer the following questions.
  
Figure 13.3.3
-Consider the market demand curve in Figure 13.3.3.If the market is perfectly competitive,which area indicates producer surplus?

Accepted Answer

A)  AEK
B)  DHK
C)  DIK
D)  DIH
E)  None of the above.F) D) and E)
G) None of the above

Question 5

Use the figure below to answer the following question.
  
Figure 13.4.3
-Refer to Figure 13.4.3.The outcome is efficient if

Accepted Answer

A)  the monopoly is able to perfectly price discriminate.
B)  the price consumers pay is equal to average total cost.
C)  the price consumers pay exceeds minimum average variable cost.
D)  the quantity produced is 80 units.
E)  the quantity produced is 20 units.F) B) and C)
G) A) and E)

Question 6

Use the figure below to answer the following questions.
  
Figure 13.4.5
-Refer to Figure 13.4.5.What is the redistribution of surplus from consumers to the producer with a perfect price-discriminating monopoly,as compared to a perfectly competitive market?

Accepted Answer

A)  EADH
B)  EABH
C)  ABD
D)  ACD
E)  KHDF) None of the above
G) B) and C)

Question 7

When a monopoly practices price discrimination ________.

Accepted Answer

A)  it charges different prices to different consumers and transfers some of the consumer surplus to economic profit
B)  it produces a smaller quantity than when it is a single-price monopoly which decreases consumer surplus
C)  new firms enter the industry, so buyers have more goods from which to choose and consumer surplus increases
D)  consumer surplus increases because the monopoly increases the quantity available for sale
E)  firms exit the industry and consumer surplus decreasesF) B) and E)
G) A) and C)

Question 8

Use the figure below to answer the following questions.
  
Figure 13.4.4
-Refer to Figure 13.4.4.Consider a market with a perfect price-discriminating monopolist.If the light grey area shows the consumer surplus and the dark grey area shows the producer surplus,which graph correctly represents this firm?

Accepted Answer

A)  (a) 
B)  (b) 
C)  (c) 
D)  (d) 
E)  none of the graphsF) C) and E)
G) C) and D)

Question 9

Use the figure below to answer the following questions.
  
Figure 13.3.3
-Consider the revenue and cost curves in Figure 13.3.3.What is the difference in consumer surplus between a single-price monopoly and a perfectly competitive market?

Accepted Answer

A)  EADH
B)  EABH
C)  ABD
D)  ACD
E)  FHDCF) A) and B)
G) B) and C)

Question 10

Suppose in an industry a firm realizes economies of scale over the entire length of its LRAC curve.In this situation,the firm is

Accepted Answer

A)  a natural monopoly.
B)  a fixed-cost monopoly.
C)  an output-discriminating monopoly.
D)  a perfect-price discriminating monopoly.
E)  a constant total variable cost monopoly.F) B) and C)
G) C) and D)

Question 11

Use the figure below to answer the following question.
  
Figure 13.4.2
-Refer to Figure 13.4.2.Assume this monopolist practises perfect price discrimination.How many tickets are sold?

Accepted Answer

A)  20 tickets
B)  60 tickets
C)  40 tickets
D)  100 tickets
E)  80 ticketsF) A) and E)
G) None of the above

Question 12

Use the information below to answer the following questions.
Fact 13.5.1
Cascade Springs Inc.is a natural monopoly that bottles water from a spring high in the Rocky Mountains.The total fixed cost it incurs is $80,000, and its marginal cost is 10 cents a bottle.The demand curve for Cascade Springs bottled water is shown in the following figure:
  
Figure 13.5.1
-Refer to Figure 13.5.1.Suppose the firm is regulated by the government that imposes marginal cost pricing.The price of a bottle of water is

Accepted Answer

A)  $0.
B)  $0.50.
C)  $0.30.
D)  $0.10.
E)  $0.20.F) C) and E)
G) All of the above

Question 13

Taking competitive rent seeking activity into account,the social cost of monopoly is equal to the

Accepted Answer

A)  deadweight loss from monopoly.
B)  monopoly's producer surplus.
C)  deadweight loss plus the monopoly's producer surplus.
D)  deadweight loss minus the monopoly's producer surplus.
E)  consumer surplus lost plus producer surplus lost.F) B) and C)
G) A) and B)

Question 14

One difference between perfectly competitive markets and a single-price monopoly is that

Accepted Answer

A)  marginal revenue equals marginal cost for perfectly competitive firms, but not for single-price monopolists.
B)  marginal cost equals average variable cost for perfectly competitive firms but not for single-price monopolists.
C)  price equals minimum average total cost for single-price monopolists but not for perfectly competitive firms.
D)  marginal revenue equals price for perfectly competitive firms, but not for single-price monopolists.
E)  none of the aboveF) A) and E)
G) C) and E)

Question 15

Canada Post has a monopoly on residential mail delivery.Pfizer Inc.makes LIPITOR,a prescription drug that lowers cholesterol.Rogers Communications is the sole provider of cable television service in some parts of Ontario.The monopolies which are legal monopolies are ________.

Accepted Answer

A)  only Pfizer
B)  Canada Post, Pfizer, and Rogers Communications
C)  Canada Post and Pfizer
D)  only Canada Post
E)  none of the aboveF) All of the above
G) None of the above

Question 16

Use the table below to answer the following question.
Table 13.2.1
 
-Refer to Table 13.2.1.Minnie's Mineral Springs,a single-price monopoly,faces the market demand schedule given in the table.Minnie will not produce a quantity at which the market demand for water is inelastic because when demand is inelastic she can ________ the quantity produced,which ________.

Accepted Answer

A)  increase;increases total revenue, decreases total cost, and increases economic profit
B)  increase;increases total revenue and increases total cost, but the increase in total cost is less than the increase in total revenue
C)  decrease;increases total revenue, decreases total cost, and increases economic profit
D)  decrease;decreases total revenue and decreases total cost, but the decrease in total cost is less than the decrease in total revenue
E)  decrease;increases total revenue, does not change total cost, and increases economic profitF) A) and B)
G) A) and C)

Question 17

Use the figure below to answer the following question.
  
Figure 13.4.2
-Refer to Figure 13.4.2.Assume this monopolist practises perfect price discrimination.What is the lowest price charged for tickets?

Accepted Answer

A)  $0
B)  $1.00
C)  $3.50
D)  $3.00
E)  $2.00F) C) and E)
G) A) and D)

Question 18

Which one of the following is true for a single-price monopolist but not for a perfectly competitive firm?

Accepted Answer

A)  The firm maximizes profit by setting marginal cost equal to marginal revenue.
B)  The firm is a price-taker.
C)  The firm can sell any level of output at any price it sets.
D)  The firm's marginal cost is less than price.
E)  The firm's marginal revenue curve is horizontal.F) A) and B)
G) B) and C)

Question 19

Use the figure below to answer the following questions.
  
Figure 13.4.6
-Prime Pharmaceuticals has developed a new asthma medicine,for which it has a patent.An inhaler can be produced at a constant marginal cost of $2 per inhaler.The demand curve,marginal revenue curve,and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6.The patent gives Prime Pharmaceuticals a monopoly for its new inhaler.If Prime Pharmaceuticals can perfectly price discriminate,then consumer surplus is

Accepted Answer

A)  zero.
B)  $24 million.
C)  $64 million.
D)  $44 million.
E)  $32 million.F) A) and B)
G) B) and D)

Question 20

A price cap is a price ________.A price cap might be a more effective way of regulating monopoly than rate of return regulation because under rate of return regulation ________.

Accepted Answer

A)  ceiling;a firm incurs an economic loss
B)  floor;price is set equal to marginal cost
C)  ceiling;the firm's managers have an incentive to inflate costs
D)  floor;the firm's managers have an incentive to purchase more than the efficient quantity of capital
E)  floor;the firm's managers have an incentive to inflate costsF) C) and D)
G) B) and D)

Exam 13: Monopoly

Correct Answer
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Use the figure below to answer the following question. Figure 13.4.2 -Refer to Figure 13.4.2.Assume this monopolist practises perfect price discrimination.How many tickets are sold?

Correct Answer
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Canada Post has a monopoly on residential mail delivery.Pfizer Inc.makes LIPITOR,a prescription drug that lowers cholesterol.Rogers Communications is the sole provider of cable television service in some parts of Ontario.The monopolies which are legal monopolies are ________.

Correct Answer
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Correct Answer
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Suppose in an industry a firm realizes economies of scale over the entire length of its LRAC curve.In this situation,the firm is

Correct Answer
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Which one of the following is true for a single-price monopolist but not for a perfectly competitive firm?

Correct Answer
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One difference between perfectly competitive markets and a single-price monopoly is that

Correct Answer
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Use the figure below to answer the following questions. Figure 13.3.3 -Consider the revenue and cost curves in Figure 13.3.3.What is the difference in consumer surplus between a single-price monopoly and a perfectly competitive market?

Correct Answer
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Correct Answer
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Taking competitive rent seeking activity into account,the social cost of monopoly is equal to the

Correct Answer
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Correct Answer
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A price cap is a price .A price cap might be a more effective way of regulating monopoly than rate of return regulation because under rate of return regulation .

Correct Answer
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The more perfectly a monopoly can price discriminate,the

Correct Answer
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Use the figure below to answer the following questions. Figure 13.4.5 -Refer to Figure 13.4.5.What is the redistribution of surplus from consumers to the producer with a perfect price-discriminating monopoly,as compared to a perfectly competitive market?

Correct Answer
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Use the figure below to answer the following question. Figure 13.4.3 -Refer to Figure 13.4.3.The outcome is efficient if

Correct Answer
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Use the figure below to answer the following questions. Figure 13.3.3 -Consider the market demand curve in Figure 13.3.3.If the market is perfectly competitive,which area indicates producer surplus?

Correct Answer
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Use the figure below to answer the following question. Figure 13.4.2 -Refer to Figure 13.4.2.Assume this monopolist practises perfect price discrimination.What is the lowest price charged for tickets?

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Use the figure below to answer the following questions. Figure 13.2.3 -Refer to Figure 13.2.3.Assume this firm is a single-price monopoly.How many tickets does this monopolist sell to maximize economic profit?

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When a monopoly practices price discrimination ________.

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Exam 13: Monopoly

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Use the figure below to answer the following question. Figure 13.4.2 -Refer to Figure 13.4.2.Assume this monopolist practises perfect price discrimination.How many tickets are sold?

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Canada Post has a monopoly on residential mail delivery.Pfizer Inc.makes LIPITOR,a prescription drug that lowers cholesterol.Rogers Communications is the sole provider of cable television service in some parts of Ontario.The monopolies which are legal monopolies are ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose in an industry a firm realizes economies of scale over the entire length of its LRAC curve.In this situation,the firm is

Correct AnswerverifiedShow Answer

Which one of the following is true for a single-price monopolist but not for a perfectly competitive firm?

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One difference between perfectly competitive markets and a single-price monopoly is that

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Use the figure below to answer the following questions. Figure 13.3.3 -Consider the revenue and cost curves in Figure 13.3.3.What is the difference in consumer surplus between a single-price monopoly and a perfectly competitive market?

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Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Taking competitive rent seeking activity into account,the social cost of monopoly is equal to the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A price cap is a price ________.A price cap might be a more effective way of regulating monopoly than rate of return regulation because under rate of return regulation ________.

Correct AnswerverifiedShow Answer

The more perfectly a monopoly can price discriminate,the

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Use the figure below to answer the following questions. Figure 13.4.5 -Refer to Figure 13.4.5.What is the redistribution of surplus from consumers to the producer with a perfect price-discriminating monopoly,as compared to a perfectly competitive market?

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Use the figure below to answer the following question. Figure 13.4.3 -Refer to Figure 13.4.3.The outcome is efficient if

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Use the figure below to answer the following questions. Figure 13.3.3 -Consider the market demand curve in Figure 13.3.3.If the market is perfectly competitive,which area indicates producer surplus?

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Use the figure below to answer the following question. Figure 13.4.2 -Refer to Figure 13.4.2.Assume this monopolist practises perfect price discrimination.What is the lowest price charged for tickets?

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Use the figure below to answer the following questions. Figure 13.2.3 -Refer to Figure 13.2.3.Assume this firm is a single-price monopoly.How many tickets does this monopolist sell to maximize economic profit?

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When a monopoly practices price discrimination ________.

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A price cap is a price .A price cap might be a more effective way of regulating monopoly than rate of return regulation because under rate of return regulation .

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