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Exam 15: Monopoly

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Question 191

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When a monopolist increases the number of units it sells, there are two effects on revenue. They are the

A) demand effect and the supply effect.
B) competition effect and the cost effect.
C) competitive effect and the monopoly effect.
D) output effect and the price effect.

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

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Question 192

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Patent and copyright laws encourage

A) creative activity.
B) lower prices due to decreasing average total costs.
C) competition among firms.
D) All of the above are correct.

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

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Question 193

Multiple Choice

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A benefit of a monopoly is

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?

A firm cannot price discriminate if it

Figure 15-13 -Refer to Figure 15-13. A profit-maximizing monopolist would create a deadweight loss to society valued at

Figure 15-17 -Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?

Figure 15-3 -Refer to Figure 15-3. Use the letters in the figure to identify the profit area for the single price monopolist.

Antitrust laws allow the government to

In the market for "home heating" consumers typically have several options (e.g., electricity, heating fuel, natural gas, propane, etc.), yet we often think of firms in this industry as behaving like monopolists. Discuss the context in which your electricity provider is a monopolist. Is this characterization universally applicable? Explain your answer.

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

A fundamental source of monopoly market power arises from

Most markets are not monopolies in the real world because

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what is the amount of profit or loss earned by the firm?

Figure 15-6 -Refer to Figure 15-6. What area measures the monopolist's profit?

When a monopolist increases the amount of output that it produces and sells, the price of its output

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Which of the following is an example of a barrier to entry?