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Which of the following is an example of public ownership of a monopoly?


A) DeBeers
B) Microsoft
C) U.S. Postal Service
D) AT&T

E) B) and C)
F) A) and D)

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Compared to the monopoly outcome with a single price, imperfect price discrimination (i) Sometimes raises total surplus. (ii) Sometimes lowers total surplus. (iii) Always leads to a lower quantity of output.


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

E) A) and C)
F) C) and D)

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A key for a monopoly that wants to practice price discrimination is to be able to control the resale of its product. ​

A) True
B) False

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Figure 15-6 Figure 15-6 -Refer to Figure 15-6. What price will the monopolist charge? A) A B) C C) K D) L -Refer to Figure 15-6. What price will the monopolist charge?


A) A
B) C
C) K
D) L

E) None of the above
F) C) and D)

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A market structure with barriers to entry is


A) a monopoly.
B) oligopolistically competitive.
C) monopolistically competitive.
D) perfectly competitive.

E) None of the above
F) All of the above

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Patents, copyrights, and trademarks


A) are examples of government-created monopolies.
B) allow their owners to reduce the costs of what they produce.
C) generate more revenue for the government than they cost consumers in the form of higher prices.
D) All of the above are correct.

E) A) and D)
F) A) and B)

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A monopolist earns higher profits by charging one price than by practicing price discrimination.

A) True
B) False

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For a firm to price discriminate,


A) it must be a natural monopoly.
B) it must be regulated by the government.
C) it must have some market power.
D) consumers must tell the firm what they are willing to pay for the product.

E) All of the above
F) None of the above

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Figure 15-4 Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to A) P5. B) P4. C) P3. D) P1. -Refer to Figure 15-4. Profit will be maximized by charging a price equal to


A) P5.
B) P4.
C) P3.
D) P1.

E) A) and B)
F) A) and C)

Correct Answer

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Patent and copyright laws encourage


A) creative activity.
B) research and development.
C) competition among firms.
D) Both a and b are correct.

E) B) and C)
F) A) and B)

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Generic drugs enter the pharmaceutical drug market once


A) the ingredients to the name brand drug have been discovered.
B) 10 years have passed.
C) they are patented.
D) the patent on the name brand drug expires.

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

Correct Answer

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Table 15-4 A monopolist faces the following demand curve: Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. In order to maximize profits, the monopolist should produce A) 7.5 units. B) 10 units. C) where marginal revenue equals marginal cost. D) Both a and c are correct. -Refer to Table 15-4. In order to maximize profits, the monopolist should produce


A) 7.5 units.
B) 10 units.
C) where marginal revenue equals marginal cost.
D) Both a and c are correct.

E) B) and D)
F) All of the above

Correct Answer

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Table 15-21 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. Table 15-21 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. -Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th tie? A) $80 B) $100 C) $110 D) $120 -Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the marginal revenue from selling the 5th tie?


A) $80
B) $100
C) $110
D) $120

E) A) and D)
F) B) and D)

Correct Answer

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A monopoly can earn positive profits because it


A) can sell unlimited quantities at any price it chooses.
B) takes the market price as given and can sell unlimited quantities.
C) can set the price it charges for its output but faces a horizontal demand curve.
D) can maintain a price such that total revenues will exceed total costs.

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

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Figure 15-21 Figure 15-21 -Refer to Figure 15-21. What is the price and quantity for this natural monopolist under fair return pricing? A) A and J B) E and J C) F and K D) H and L -Refer to Figure 15-21. What is the price and quantity for this natural monopolist under fair return pricing?


A) A and J
B) E and J
C) F and K
D) H and L

E) A) and D)
F) A) and C)

Correct Answer

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If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will


A) earn economic losses.
B) earn economic profits.
C) earn zero economic profits.
D) produce a lower quantity of output than is socially optimal.

E) B) and C)
F) C) and D)

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​As long as as a monopolist is able to control the resale of its product, then it can successfully practice price discrimination.

A) True
B) False

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Table 15-1 Table 15-1 -Refer to Table 15-1. The marginal revenue becomes negative with the production of which unit of output? -Refer to Table 15-1. The marginal revenue becomes negative with the production of which unit of output?

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Figure 15-4 Figure 15-4 -Refer to Figure 15-4. If this firm profit maximizes, which letter represents the price it will charge? -Refer to Figure 15-4. If this firm profit maximizes, which letter represents the price it will charge?

Correct Answer

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Figure 15-19 Figure 15-19 -Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to A) $0. B) $1,562.50. C) $3,125. D) $6,250. -Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to


A) $0.
B) $1,562.50.
C) $3,125.
D) $6,250.

E) B) and D)
F) B) and C)

Correct Answer

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