Question 1

For a monopoly,a negative marginal revenue implies:

Accepted Answer

A)   the price effect is larger than the quantity effect.
B)   total revenues are increasing.
C)   that the demand is price elastic.
D)   the quantity effect is larger than the price effect.E) All of the above
F) B) and C)

Question 2

The equilibrium price and quantity in a monopoly market:

Accepted Answer

A)   is efficient.
B)   is the same as a perfectly competitive market.
C)   causes a loss of total surplus.
D)   causes no welfare costs.E) B) and C)
F) A) and D) C

Question 3

Government regulations:

Accepted Answer

A)   always seek to increase competition.
B)   sometimes protect monopoly power in certain industries.
C)   never protect monopoly rights.
D)   usually are ineffective.E) C) and D)
F) B) and D)

Question 4

This table represents the revenues faced by a monopolist. rd unit is: A)  $100 B)  $800 C)  $600 D)  $500" class="answers-bank-image d-inline" rel="preload" > Using the information in the table shown,the marginal revenue for the 3rd unit is:

Accepted Answer

A)   $100
B)   $800
C)   $600
D)   $500E) B) and D)
F) A) and D)

Question 5

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

Accepted Answer

A)   is minimized when total revenue is maximized.
B)   lies above the average revenue curve.
C)   lies below the demand curve.
D)   is the same as the demand curve.E) A) and B)
F) A) and C)

Question 6

Total revenues increase as output increases along sections of the demand curve that are:

Accepted Answer

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

Question 7

When government owns a natural monopoly and avoids subsidies,it:

Accepted Answer

A)   still creates deadweight loss.
B)   sets price above marginal cost.
C)   recognizes setting price equal to marginal cost would cause the enterprise to incur losses.
D)   All of these statements are true.E) None of the above
F) C) and D)

Question 8

When a monopolist increases output,total revenue will:

Accepted Answer

A)   increase if the price effect outweighs the quantity effect.
B)   decrease if the quantity effect outweighs the price effect.
C)   increase if the quantity effect outweighs the price effect.
D)   increase but it will have no price effect.E) A) and B)
F) A) and C)

Question 9

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

Accepted Answer

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

Question 10

A consequence of a publicly owned natural monopoly is:

Accepted Answer

A)   the loss of the profit motive.
B)   an increase in the motivation to improve efficiency.
C)   increased public pressure to reduce costs.
D)   reduced chance to remain open longer than political terms of office.E) A) and B)
F) A) and D)

Question 11

Monopoly power in a market causes:

Accepted Answer

A)   monopolists to earn economic profits of zero.
B)   consumers to gain.
C)   market surplus to be lost.
D)   producers to worry about competition.E) None of the above
F) A) and B)

Question 12

A perfect monopoly:

Accepted Answer

A)   has no competition at all.
B)   has complete market control.
C)   restricts output to maximize profits.
D)   All of these statements are true.E) None of the above
F) B) and D)

Question 13

This graph shows the cost and revenue curves faced by a monopoly.  According to the graph shown,if Q2 units are being produced,this monopolist:

Accepted Answer

A)   is earning negative profits.
B)   should cut back production to increase profits.
C)   is maximizing revenue.
D)   is maximizing profits.E) A) and B)
F) None of the above

Question 14

Antitrust activities by the government:

Accepted Answer

A)   can cause inefficiencies.
B)   are accused of being politically motivated.
C)   sometimes increase the efficiency of a market.
D)   All of these statements are true.E) A) and D)
F) None of the above

Question 15

For a monopolist,the quantity effect:

Accepted Answer

A)   is the increase in revenues from selling a greater quantity at a lower price.
B)   is the decrease in revenues from selling a greater quantity at a lower price.
C)   is always outweighed by the price effect.
D)   always outweighs the price effect.E) A) and D)
F) C) and D)

Question 16

This table represents the revenues faced by a monopolist.  Using the information in the table shown,if you were to graph the first two columns,you would have graphed which curve?

Accepted Answer

A)   Marginal revenue
B)   Market supply
C)   Market demand
D)   Total productivityE) C) and D)
F) A) and B)

Question 17

For a monopoly,when marginal revenue is zero:

Accepted Answer

A)   profits are maximized.
B)   total revenue is maximized.
C)   marginal revenue is minimized.
D)   marginal costs are minimized.E) A) and B)
F) B) and C) B

Question 18

For a monopolist,at the profit-maximizing level of output price is:

Accepted Answer

A)   equal to marginal revenue.
B)   equal to marginal cost.
C)   chosen according to demand.
D)   constant.E) All of the above
F) A) and B) C

Question 19

This table represents the revenues faced by a monopolist.  Using the information in the table shown,the average revenue for this firm:

Accepted Answer

A)   decreases as output increases.
B)   increases as output increases.
C)   remains constant regardless of level of output.
D)   is maximized when total revenue is maximized.E) A) and D)
F) None of the above

Question 20

One way a government might protect monopoly rights is by:

Accepted Answer

A)   granting a patent.
B)   heavily taxing alcohol and cigarettes.
C)   running unsubsidized state-owned enterprises that compete with private firms.
D)   All of these are ways the government protects monopoly rights.E) A) and C)
F) A) and B)

Exam 14: Monopoly

For a monopoly,a negative marginal revenue implies:

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The equilibrium price and quantity in a monopoly market:

Correct AnswerverifiedC

Government regulations:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 3rd unit is:

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

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Total revenues increase as output increases along sections of the demand curve that are:

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When government owns a natural monopoly and avoids subsidies,it:

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When a monopolist increases output,total revenue will:

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

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A consequence of a publicly owned natural monopoly is:

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Monopoly power in a market causes:

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A perfect monopoly:

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This graph shows the cost and revenue curves faced by a monopoly. According to the graph shown,if Q2 units are being produced,this monopolist:

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Antitrust activities by the government:

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For a monopolist,the quantity effect:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,if you were to graph the first two columns,you would have graphed which curve?

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For a monopoly,when marginal revenue is zero:

Correct AnswerverifiedB

For a monopolist,at the profit-maximizing level of output price is:

Correct AnswerverifiedC

This table represents the revenues faced by a monopolist. Using the information in the table shown,the average revenue for this firm:

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One way a government might protect monopoly rights is by:

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C

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 3^rd unit is:

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B

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C

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