Question 1

The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

Accepted Answer

A) True 
 B)False

Question 2

Perfect price discrimination

Accepted Answer

A)   increases profits to the firm.
B)   increases total surplus.
C)   decreases consumer surplus.
D)   All of the above are correct.E) C) and D)
F) A) and C)

Question 3

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.E) None of the above
F) A) and B)

Question 4

A monopoly market is characterized by

Accepted Answer

A)   many buyers and sellers.
B)   "natural" products.
C)   barriers to entry.
D)   a Nash equilibrium.E) A) and C)
F) A) and D)

Question 5

Which of the following statements is not correct?

Accepted Answer

A)   Consumers will likely benefit in the form of lower prices from buying a product made by a natural monopoly than if the market were served by several firms.
B)   Monopolists typically charge higher prices than competitive firms.
C)   Monopolists typically produce larger quantities of output than competitive firms.
D)   Consumers may benefit from monopolies if the firms invest their higher profits into something that benefits society such as medical research.E) A) and C)
F) A) and B)

Question 6

For a monopoly firm,which of the following equalities is always true?

Accepted Answer

A)   price = marginal revenue
B)   price = average revenue
C)   price = total revenue
D)   marginal revenue = marginal costE) B) and D)
F) A) and C)

Question 7

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Accepted Answer

A) True 
 B)False

Question 8

Table 15-12
The following table provides information on the price,quantity,and average total cost for a monopoly.
 
-Refer to Table 15-12.If the firm produces the profit-maximizing level of output,it will earn profits of

Accepted Answer

A)   $24.
B)   $18.
C)   $15.
D)   $12.E) All of the above
F) None of the above

Question 9

Monopolists can achieve any level of profit they desire because they have unlimited market power.

Accepted Answer

A) True 
 B)False

Question 10

Natural monopolies differ from other forms of monopoly because they are

Accepted Answer

A)   not subject to barriers to entry.
B)   not regulated by government.
C)   unable to sustain long-run profits.
D)   are generally not worried about competition eroding their monopoly position in the market.E) C) and D)
F) B) and D)

Question 11

Which of the following is an example of a barrier to entry? (i) 
A key resource is owned by a single firm.
(ii) 
The costs of production make a single producer more efficient than a large number of producers.
(iii) 
The government has given the existing monopolist the exclusive right to produce the good.

Accepted Answer

A)   (i) and (ii) only
B)   (ii) and (iii) only
C)   (i) only
D)   (i) , (ii) ,and (iii) E) A) and D)
F) B) and C)

Question 12

Figure 15-17 
-Refer to Figure 15-17.The deadweight loss caused by a profit-maximizing monopoly amounts to

Accepted Answer

A)   $225.
B)   $450.
C)   $900.
D)   $1,350.E) C) and D)
F) A) and D)

Question 13

When a monopolist increases the amount of output that it produces and sells,average revenue

Accepted Answer

A)   increases,and marginal revenue increases.
B)   increases,and marginal revenue decreases.
C)   decreases,and marginal revenue increases.
D)   decreases,and marginal revenue decreases.E) None of the above
F) All of the above

Question 14

Suppose a profit-maximizing monopolist faces a constant marginal cost of $10,produces an output level of 100 units,and charges a price of $50.The socially efficient level of output is 200 units.Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines.The monopoly deadweight loss equals $4,000.

Accepted Answer

A) True 
 B)False

Question 15

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) A) and C)
F) All of the above

Question 16

The simplest way for a monopoly to arise is for a single firm to

Accepted Answer

A)   decrease its price below its competitors' prices.
B)   decrease production to increase demand for its product.
C)   make pricing decisions jointly with other firms.
D)   own a key resource.E) All of the above
F) B) and D)

Question 17

Table 15-5
A monopolist faces the following demand curve:
 
-Refer to Table 15-5.The monopolist has total fixed costs of $60 and has a constant marginal cost of $15.What is the profit-maximizing price?

Accepted Answer

A)   $4
B)   $39
C)   $36
D)   $42E) A) and D)
F) A) and B)

Question 18

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) All of the above

Question 19

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 C)
F) All of the above

Question 20

If the monopolist's linear demand curve intersects the quantity axis at Q = 30,then the monopolist's marginal revenue will be equal to zero at

Accepted Answer

A)   Q = 10.
B)   Q = 15.
C)   Q = 20.
D)   Q = 30.E) A) and D)
F) All of the above

Exam 15: Monopoly

Table 15-12 The following table provides information on the price,quantity,and average total cost for a monopoly. -Refer to Table 15-12.If the firm produces the profit-maximizing level of output,it will earn profits of

Correct Answer
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Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5.The monopolist has total fixed costs of $60 and has a constant marginal cost of $15.What is the profit-maximizing price?

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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For a monopoly,

Correct Answer
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Correct Answer
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One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Correct Answer
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Monopolists can achieve any level of profit they desire because they have unlimited market power.

Correct Answer
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The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

Correct Answer
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Figure 15-17 -Refer to Figure 15-17.The deadweight loss caused by a profit-maximizing monopoly amounts to

Correct Answer
verified

If the monopolist's linear demand curve intersects the quantity axis at Q = 30,then the monopolist's marginal revenue will be equal to zero at

Correct Answer
verified

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

Correct Answer
verified

When a monopolist increases the amount of output that it produces and sells,average revenue

Correct Answer
verified

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
verified

A monopoly market is characterized by

Correct Answer
verified

For a monopoly firm,which of the following equalities is always true?

Correct Answer
verified

Natural monopolies differ from other forms of monopoly because they are

Correct Answer
verified

The simplest way for a monopoly to arise is for a single firm to

Correct Answer
verified

Perfect price discrimination

Correct Answer
verified

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

Correct Answer
verified

Exam 15: Monopoly

Table 15-12 The following table provides information on the price,quantity,and average total cost for a monopoly. -Refer to Table 15-12.If the firm produces the profit-maximizing level of output,it will earn profits of

Correct AnswerverifiedShow Answer

Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5.The monopolist has total fixed costs of $60 and has a constant marginal cost of $15.What is the profit-maximizing price?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

For a monopoly,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Correct AnswerverifiedShow Answer

Monopolists can achieve any level of profit they desire because they have unlimited market power.

Correct AnswerverifiedShow Answer

The De Beers Diamond company is not worried about differentiating its product from all other gemstones.

Correct AnswerverifiedShow Answer

Figure 15-17 -Refer to Figure 15-17.The deadweight loss caused by a profit-maximizing monopoly amounts to

Correct AnswerverifiedShow Answer

If the monopolist's linear demand curve intersects the quantity axis at Q = 30,then the monopolist's marginal revenue will be equal to zero at

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When a monopolist increases the amount of output that it produces and sells,average revenue

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

A monopoly market is characterized by

Correct AnswerverifiedShow Answer

For a monopoly firm,which of the following equalities is always true?

Correct AnswerverifiedShow Answer

Natural monopolies differ from other forms of monopoly because they are

Correct AnswerverifiedShow Answer

The simplest way for a monopoly to arise is for a single firm to

Correct AnswerverifiedShow Answer

Perfect price discrimination

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A monopoly is an inefficient way to produce a product because

Correct AnswerverifiedShow Answer

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