Question 1

If a monopolist is able to perfectly price discriminate,

Accepted Answer

A)   consumer surplus is always increased.
B)   total surplus is always decreased.
C)   consumer surplus and deadweight losses are transformed into monopoly profits.
D)   the price effect dominates the output effect on monopoly revenue.E) A) and B)
F) A) and C)

Question 2

Deadweight loss

Accepted Answer

A)   measures monopoly inefficiency.
B)   exceeds monopoly profits.
C)   equals monopoly profits.
D)   equals monopoly revenues minus profits.E) B) and C)
F) C) and D)

Question 3

Scenario 15-3
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34.
-Refer to Scenario 15-3.At Q = 500,the firm's profit is

Accepted Answer

A)   $13,000.
B)   $15,000.
C)   $17,000.
D)   $30,000.E) None of the above
F) B) and C)

Question 4

The social cost of a monopoly is equal to its

Accepted Answer

A)   economic profit.
B)   fixed cost.
C)   dead weight loss.
D)   variable cost.E) A) and C)
F) A) and D)

Question 5

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the profit-maximizing price?

Accepted Answer

A)   $6
B)   $9
C)   $12
D)   $15E) A) and B)
F) A) and D)

Question 6

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Accepted Answer

A)   consumer surplus.
B)   consumer benefit.
C)   price discriminant.
D)   deadweight loss.E) A) and D)
F) None of the above

Question 7

When a monopolist is able to sell its product at different prices,it is engaging in

Accepted Answer

A)   distribution pricing.
B)   quality-adjusted pricing.
C)   arbitrage.
D)   price discrimination.E) None of the above
F) B) and D)

Question 8

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Accepted Answer

A) True 
 B)False

Question 9

A natural monopoly occurs when

Accepted Answer

A)   the product is sold in its natural state, such as water or diamonds.
B)   there are economies of scale over the relevant range of output.
C)   the firm is characterized by a rising marginal cost curve.
D)   production requires the use of free natural resources, such as water or air.E) None of the above
F) All of the above

Question 10

There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Accepted Answer

If deregulation leads to increased compe...

Question 11

In a market characterized by monopoly,the market demand curve is

Accepted Answer

A)   upward sloping.
B)   horizontal.
C)   downward sloping.
D)   vertical.E) B) and D)
F) A) and B)

Question 12

Scenario 15-4
Suppose a monopolist has a demand curve that can be expressed as P=90-Q. The monopolist's marginal revenue curve can be expressed as MR=90-2Q. The monopolist has constant marginal costs and average total costs of $10.
-Refer to Scenario 15-4.The profit-maximizing monopolist will produce an output level of

Accepted Answer

A)   80 units.
B)   40 units.
C)   20 units.
D)   10 units.E) None of the above
F) All of the above

Question 13

What is the shape of the monopolist's marginal revenue curve?

Accepted Answer

A)   a downward-sloping line that is identical to the demand curve
B)   a downward-sloping line that lies below the demand curve
C)   a horizontal line that is identical to the demand curve
D)   a horizontal line that lies below the demand curveE) B) and D)
F) All of the above

Question 14

A monopoly's marginal cost will

Accepted Answer

A)   be less than its average fixed cost.
B)   be less than the price per unit of its product.
C)   exceed its marginal revenue.
D)   equal its average total cost.E) A) and D)
F) B) and D)

Question 15

Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6.How much additional profit can the concert promoters earn by charging each customer their willingness to pay relative to charging a flat price of $50 per ticket?

Accepted Answer

A)   $25,000
B)   $50,000
C)   $75,000
D)   $100,000E) A) and B)
F) A) and C)

Question 16

Figure 15-10
 
-Refer to Figure 15-10.Which area represents the deadweight loss from monopoly?

Accepted Answer

A)   J
B)   H
C)   A+B+C+D+F+I+J+H
D)   J+HE) All of the above
F) None of the above

Question 17

Describe how government is involved in creating a monopoly.Why might the government create one? Give an example.

Accepted Answer

The government can create a monopoly by ...

Question 18

A natural monopolist's ability to price its product is

Accepted Answer

A)   constrained by the market demand curve.
B)   constrained by market supply.
C)   not affected by market demand.
D)   enhanced by regulatory control of the government.E) All of the above
F) B) and C)

Question 19

The task of economic regulation is to

Accepted Answer

A)   protect monopoly profits.
B)   approximate the results of the competitive market.
C)   replace competition with government ownership.
D)   increase competition within the market.E) None of the above
F) A) and B)

Question 20

Table 15-4
A monopolist faces the following demand curve:
 
-Refer to Table 15-4.If the monopolist produces 5 units,what is its average revenue?

Accepted Answer

A)   $100
B)   $20
C)   $5
D)   $4E) A) and D)
F) B) and D)

Exam 15: Monopoly.

A natural monopolist's ability to price its product is

Correct Answer
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Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the profit-maximizing price?

Correct Answer
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What is the shape of the monopolist's marginal revenue curve?

Correct Answer
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Figure 15-10 -Refer to Figure 15-10.Which area represents the deadweight loss from monopoly?

Correct Answer
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Deadweight loss

Correct Answer
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There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Correct Answer
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If deregulation leads to increased compe...
View Answer

If a monopolist is able to perfectly price discriminate,

Correct Answer
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Describe how government is involved in creating a monopoly.Why might the government create one? Give an example.

Correct Answer
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The government can create a monopoly by ...
View Answer

Correct Answer
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When a monopolist is able to sell its product at different prices,it is engaging in

Correct Answer
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Scenario 15-3 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. -Refer to Scenario 15-3.At Q = 500,the firm's profit is

Correct Answer
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In a market characterized by monopoly,the market demand curve is

Correct Answer
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Correct Answer
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The task of economic regulation is to

Correct Answer
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A monopolist maximizes profit by producing an output level where marginal cost equals price.

Correct Answer
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A natural monopoly occurs when

Correct Answer
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Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.If the monopolist produces 5 units,what is its average revenue?

Correct Answer
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Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Correct Answer
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A monopoly's marginal cost will

Correct Answer
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The social cost of a monopoly is equal to its

Correct Answer
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Exam 15: Monopoly.

A natural monopolist's ability to price its product is

Correct AnswerverifiedShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the profit-maximizing price?

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What is the shape of the monopolist's marginal revenue curve?

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Figure 15-10 -Refer to Figure 15-10.Which area represents the deadweight loss from monopoly?

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Deadweight loss

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There has been much discussion of deregulating electricity and natural gas delivery companies in the United States.Discuss the likely effect of deregulation on prices in these two industries.

Correct AnswerverifiedIf deregulation leads to increased compe...View AnswerShow Answer

If a monopolist is able to perfectly price discriminate,

Correct AnswerverifiedShow Answer

Describe how government is involved in creating a monopoly.Why might the government create one? Give an example.

Correct AnswerverifiedThe government can create a monopoly by ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

When a monopolist is able to sell its product at different prices,it is engaging in

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Scenario 15-3 A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. -Refer to Scenario 15-3.At Q = 500,the firm's profit is

Correct AnswerverifiedShow Answer

In a market characterized by monopoly,the market demand curve is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The task of economic regulation is to

Correct AnswerverifiedShow Answer

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Correct AnswerverifiedShow Answer

A natural monopoly occurs when

Correct AnswerverifiedShow Answer

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.If the monopolist produces 5 units,what is its average revenue?

Correct AnswerverifiedShow Answer

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Correct AnswerverifiedShow Answer

A monopoly's marginal cost will

Correct AnswerverifiedShow Answer

The social cost of a monopoly is equal to its

Correct AnswerverifiedShow Answer

Correct Answer
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If deregulation leads to increased compe...
View Answer

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The government can create a monopoly by ...
View Answer

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