Question 1

Exhibit 8-6 Monopoly
 
-Exhibit 8-6 indicates that a monopolist maximizes profits at output equal to:

Accepted Answer

A)   0.
B)   6.
C)   8.
D)   9.
E)   10.F) C) and D)
G) A) and B)

Question 2

When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve,the price elasticity of demand is:

Accepted Answer

A)   greater than 1.
B)   equal to 1.
C)   less than 2.
D)   equal to 0.E) None of the above
F) A) and C)

Question 3

The profit-maximizing output level for a monopolist is where the:

Accepted Answer

A)   price is maximized.
B)   output sold is maximized.
C)   ATC curve is minimized.
D)   maximum efficiency is achieved.
E)   MR = MC.F) D) and E)
G) A) and E)

Question 4

Exhibit 8-7 Monopolist
 
-As shown in Exhibit 8-7,in the short run,the monopoly will:

Accepted Answer

A)   earn an hourly profit of $240.
B)   earn an hourly profit of $80.
C)   break even (i.e., earn zero economic profit) .
D)   suffer an hourly loss of $160.E) A) and B)
F) B) and C)

Question 5

A monopolist always faces a demand curve that is:

Accepted Answer

A)   perfectly inelastic.
B)   perfectly elastic.
C)   unit elastic.
D)   the same as the entire market demand curve.E) All of the above
F) A) and B)

Question 6

The monopolist faces:

Accepted Answer

A)   a perfectly inelastic demand curve.
B)   a perfectly elastic demand curve.
C)   the entire market demand curve.
D)   all of the above.E) None of the above
F) C) and D)

Question 7

At the point where the marginal revenue equals zero for a monopolist facing a straight-line demand curve,total revenue is:

Accepted Answer

A)   greater than 1.
B)   maximum.
C)   less than 1.
D)   equal to zero.E) C) and D)
F) B) and D)

Question 8

Exhibit 8-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine
 
-In Exhibit 8-3,how much vaccine should GeneTech produce to maximize its profit?

Accepted Answer

A)   300 doses per hour.
B)   400 doses per hour.
C)   Between 400 and 500 doses per hour.
D)   500 doses per hour.E) A) and B)
F) B) and D)

Question 9

A monopolist always earns an economic profit.

Accepted Answer

A) True 
 B)False

Question 10

Both a perfectly competitive firm and a monopolist:

Accepted Answer

A)   always earn an economic profit.
B)   maximize profit by setting marginal cost equal to marginal revenue.
C)   maximize profit by setting marginal cost equal to average total cost.
D)   are price takers.E) C) and D)
F) B) and D)

Question 11

At the long-run equilibrium level of output,the monopolist's marginal cost will:

Accepted Answer

A)   exceed price.
B)   equal price.
C)   be less than price.
D)   be less than marginal revenue.E) A) and B)
F) All of the above

Question 12

For a monopolist to practice price discrimination,one necessary condition is that the product offered for sale must be:

Accepted Answer

A)   high quality.
B)   expensive.
C)   cheap.
D)   impossible or difficult to resell.E) A) and D)
F) A) and C)

Question 13

Monopolies may earn economic losses in the long run.

Accepted Answer

A) True 
 B)False

Question 14

For a monopolist with a downward-sloping demand curve,

Accepted Answer

A)   the coefficient of price elasticity of demand is infinite.
B)   the coefficient of price elasticity of demand is zero.
C)   as price increases, marginal revenue decreases.
D)   as price decreases, marginal revenue decreases.
E)   when the price is equal to zero, marginal revenue is equal to zero.F) A) and E)
G) A) and D)

Question 15

For a monopolist to practice effective price discrimination,one necessary condition is:

Accepted Answer

A)   identical price elasticity among groups of buyers.
B)   differences in the price elasticity of demand among groups of buyers.
C)   that the product is homogeneous market.
D)   none of the above.E) None of the above
F) C) and D)

Question 16

Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve passes above its average total cost curve.The firm will:

Accepted Answer

A)   make an economic profit.
B)   stay in operation in the short run, but shut down in the long run.
C)   shut down in the short run.
D)   lower the price.E) A) and B)
F) None of the above

Question 17

Compared to a perfectly competitive firm,a monopolist:

Accepted Answer

A)   charges a higher price.
B)   produces lower output.
C)   fails to achieve an efficient allocation of resources.
D)   all of the above.E) A) and C)
F) C) and D)

Question 18

Under what conditions might a monopoly lose money?

Accepted Answer

Any firm could incur...

Question 19

Exhibit 8-6 Monopoly
 
-The maximum possible total monopoly profit in Exhibit 8-6 is:

Accepted Answer

A)   $60.
B)   $36.
C)   $24.
D)   $18.
E)   $12.F) A) and C)
G) A) and B)

Question 20

Exhibit 8-4 Demand and cost curves for a monopolist
 
-Although a monopoly can charge any price it wishes,it chooses:

Accepted Answer

A)   the highest price.
B)   price equal to marginal cost.
C)   the price that maximizes profit.
D)   competitive prices.
E)   a fair price.F) B) and C)
G) C) and E)

Exam 8: Monopoly

Exhibit 8-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine -In Exhibit 8-3,how much vaccine should GeneTech produce to maximize its profit?

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The monopolist faces:

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At the point where the marginal revenue equals zero for a monopolist facing a straight-line demand curve,total revenue is:

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Under what conditions might a monopoly lose money?

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When marginal revenue is zero for a monopolist facing a downward-sloping straight-line demand curve,the price elasticity of demand is:

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Exhibit 8-4 Demand and cost curves for a monopolist -Although a monopoly can charge any price it wishes,it chooses:

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For a monopolist with a downward-sloping demand curve,

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A monopolist always faces a demand curve that is:

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Exhibit 8-6 Monopoly -Exhibit 8-6 indicates that a monopolist maximizes profits at output equal to:

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Exhibit 8-6 Monopoly -The maximum possible total monopoly profit in Exhibit 8-6 is:

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A monopolist always earns an economic profit.

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Both a perfectly competitive firm and a monopolist:

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The profit-maximizing output level for a monopolist is where the:

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At the long-run equilibrium level of output,the monopolist's marginal cost will:

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Compared to a perfectly competitive firm,a monopolist:

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For a monopolist to practice effective price discrimination,one necessary condition is:

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Assume a monopolist's marginal cost and marginal revenue curves intersect and the demand curve passes above its average total cost curve.The firm will:

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For a monopolist to practice price discrimination,one necessary condition is that the product offered for sale must be:

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Exhibit 8-7 Monopolist -As shown in Exhibit 8-7,in the short run,the monopoly will:

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Monopolies may earn economic losses in the long run.

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Any firm could incur...
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