Question 1

One way the government can introduce competition into a monopoly industry is to:

Accepted Answer

A)  break up the company along different stages of the production process.
B)  split it vertically.
C)  split it horizontally.
D)  All of these statements are true.E) A) and B)
F) C) and D)

Question 2

A natural monopoly is a market in which a single firm:

Accepted Answer

A)  can produce,at a lower cost than multiple firms,the entire quantity of output demanded.
B)  owns a key resource or input into the production of the good.
C)  is protected from competition through government legislation.
D)  gains market share over time through aggressive tactics.E) C) and D)
F) A) and D)

Question 3

Total revenue decreases as output increases when demand is:

Accepted Answer

A)  downward sloping.
B)  perfectly elastic.
C)  price inelastic.
D)  price elastic.E) All of the above
F) A) and D)

Question 4

The revenue curves the monopoly faces are different from that a perfectly competitive firm faces in that:

Accepted Answer

A)  the marginal revenue curve is downward sloping instead of flat.
B)  the average revenue curve is no longer equal to price.
C)  the marginal revenue curve is now flat instead of downward sloping.
D)  The revenue curves are the same for a firm regardless of market structure.E) A) and B)
F) A) and C)

Question 5

One way DeBeers managed to maintain control over the diamond industry was to:

Accepted Answer

A)  punish companies that did business with other independent diamond producers.
B)  create the illusion of no close substitutes through marketing.
C)  buy companies that newly discovered diamond deposits.
D)  All of these statements are true.E) A) and B)
F) A) and C)

Question 6

For a monopoly producing any output level greater than one,the average revenue curve:

Accepted Answer

A)  is the same as the demand curve.
B)  lies about the demand curve.
C)  lies below the demand curve.
D)  can be negative.E) None of the above
F) C) and D)

Question 7

The monopolist and the perfectly competitive firm both choose to maximize profits by choosing the level of output where:

Accepted Answer

A)  MC equals MR and price is equal to minimum ATC.
B)  the two types of firms make their profit-maximizing decision differently.
C)  MC equals MR and price is equal to AR.
D)  MC equals AR and price is equal to minimum ATC.E) A) and B)
F) C) and D)

Question 8

Some economists argue the best response to a monopoly is to:

Accepted Answer

A)  do nothing at all.
B)  do whatever the public demands.
C)  never publicly own enterprises because it raises taxes.
D)  None of these statements is true.E) None of the above
F) A) and B)

Question 9

When a monopolist chooses the level of output where marginal cost equals marginal revenue:

Accepted Answer

A)  the price equals average revenue.
B)  the price equals marginal revenue.
C)  the price is lower than average revenue.
D)  the price is lower than marginal revenue.E) A) and B)
F) A) and C)

Question 10

The loss of the profit motive by a publicly-owned natural monopoly causes which of the following to happen?

Accepted Answer

A)  Increased pressure from the public to turn a profit
B)  Increased pressure from the public to cut costs
C)  Decreased incentive to improve efficiency
D)  Increased motivation to cut costsE) B) and C)
F) A) and D)

Question 11

A perfect monopoly:

Accepted Answer

A)  refers to a single seller.
B)  is rare.
C)  controls 100 percent of the market for a product.
D)  All of these statements are true.E) A) and D)
F) C) and D)

Question 12

One way a government might protect monopoly rights is by:

Accepted Answer

A)  granting a patent.
B)  having copyright laws.
C)  subsidizing state-owned entities.
D)  All of these are ways to protect monopoly rights.E) None of the above
F) A) and D)

Question 13

If a monopoly wishes to sell more output,it must:

Accepted Answer

A)  lower the price on all units.
B)  find a more cost effective way to produce its goods.
C)  be in the economies of scale range of its ATC.
D)  eliminate its existing competition.E) C) and D)
F) None of the above

Exam 14: Monopoly

For a monopoly producing any output level greater than one,the average revenue curve:

Correct Answer
verified

One way DeBeers managed to maintain control over the diamond industry was to:

Correct Answer
verified

One way the government can introduce competition into a monopoly industry is to:

Correct Answer
verified

The monopolist and the perfectly competitive firm both choose to maximize profits by choosing the level of output where:

Correct Answer
verified

Some economists argue the best response to a monopoly is to:

Correct Answer
verified

When a monopolist chooses the level of output where marginal cost equals marginal revenue:

Correct Answer
verified

Total revenue decreases as output increases when demand is:

Correct Answer
verified

If a monopoly wishes to sell more output,it must:

Correct Answer
verified

A perfect monopoly:

Correct Answer
verified

A natural monopoly is a market in which a single firm:

Correct Answer
verified

The revenue curves the monopoly faces are different from that a perfectly competitive firm faces in that:

Correct Answer
verified

The loss of the profit motive by a publicly-owned natural monopoly causes which of the following to happen?

Correct Answer
verified

One way a government might protect monopoly rights is by:

Correct Answer
verified

Exam 14: Monopoly

For a monopoly producing any output level greater than one,the average revenue curve:

Correct AnswerverifiedShow Answer

One way DeBeers managed to maintain control over the diamond industry was to:

Correct AnswerverifiedShow Answer

One way the government can introduce competition into a monopoly industry is to:

Correct AnswerverifiedShow Answer

The monopolist and the perfectly competitive firm both choose to maximize profits by choosing the level of output where:

Correct AnswerverifiedShow Answer

Some economists argue the best response to a monopoly is to:

Correct AnswerverifiedShow Answer

When a monopolist chooses the level of output where marginal cost equals marginal revenue:

Correct AnswerverifiedShow Answer

Total revenue decreases as output increases when demand is:

Correct AnswerverifiedShow Answer

If a monopoly wishes to sell more output,it must:

Correct AnswerverifiedShow Answer

A perfect monopoly:

Correct AnswerverifiedShow Answer

A natural monopoly is a market in which a single firm:

Correct AnswerverifiedShow Answer

The revenue curves the monopoly faces are different from that a perfectly competitive firm faces in that:

Correct AnswerverifiedShow Answer

The loss of the profit motive by a publicly-owned natural monopoly causes which of the following to happen?

Correct AnswerverifiedShow Answer

One way a government might protect monopoly rights is by:

Correct AnswerverifiedShow Answer

Correct Answer
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