Question 1

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost, the government will likely need to subsidize the firm.

Accepted Answer

A) True 
 B)False

Question 2

Figure 15-4 
-Refer to Figure 15-4. The marginal cost curve for a monopoly firm is depicted by curve

Accepted Answer

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

Question 3

The proper level of government intervention is unclear when dealing with a monopoly.

Accepted Answer

A) True 
 B)False

Question 4

Table 15-19
A monopolist faces the following demand curve: 
-Refer to Table 15-19. If a monopolist faces a constant marginal cost of $1, how much output should the firm produce in order to equate marginal revenue with marginal cost?

Accepted Answer

A)  3 units
B)  4 units
C)  5 units
D)  6 unitsE) A) and B)
F) A) and C)

Question 5

Deadweight loss

Accepted Answer

A)  measures monopoly inefficiency.
B)  exceeds monopoly profits.
C)  equals monopoly profits.
D)  equals monopoly revenues minus profits.E) None of the above
F) A) and B)

Question 6

Figure 15-1 
-Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit-maximizing monopolist to take advantage of

Accepted Answer

A)  economies of scale.
B)  diseconomies of scale.
C)  diminishing marginal product.
D)  increasing marginal cost.E) A) and B)
F) B) and C)

Question 7

Competitive firms have

Accepted Answer

A)  downward-sloping demand curves, and they can sell as much output as they desire at the market price.
B)  downward-sloping demand curves, and they can sell only a limited quantity of output at each price.
C)  horizontal demand curves, and they can sell as much output as they desire at the market price.
D)  horizontal demand curves, and they can sell only a limited quantity of output at each price.E) A) and C)
F) B) and D)

Question 8

State one benefit of government-granted monopolies like patents and copyrights.

Accepted Answer

increased ...

Question 9

Which of the following formulas would correctly calculate a monopolist's profit?

Accepted Answer

A)  profit = price - marginal cost
B)  profit = price - average total cost
C)  profit = (price - marginal cost)  × quantity
D)  profit = (price - average total cost)  × quantityE) B) and C)
F) None of the above

Question 10

In order for a firm to maximize profits through price discrimination, the firm must have some market power and be able to prevent arbitrage.

Accepted Answer

A) True 
 B)False

Question 11

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

Accepted Answer

A)  not in the best interest of society.
B)  one that fails to maximize total economic well-being.
C)  inefficient.
D)  All of the above are correct.E) A) and C)
F) A) and D)

Question 12

Suppose a profit-maximizing monopolist faces a constant marginal cost of $20, produces an output level of 100 units, and charges a price of $50. The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $1,500.

Accepted Answer

A) True 
 B)False

Question 13

Monopoly profit is not a social problem because

Accepted Answer

A)  the size of the economic pie grows when monopoly profits increase.
B)  producers are more efficient than consumers.
C)  the profit represents a transfer from the consumer to the producer with no loss in total surplus.
D)  None of the above are correct.E) A) and B)
F) A) and C)

Question 14

Because a monopolist must lower its price in order to sell another unit of output,

Accepted Answer

A)  marginal revenue is less than price.
B)  long-term economic profits will be zero.
C)  total revenue increases as price increases.
D)  average revenue is less than price.E) A) and C)
F) B) and D)

Question 15

Patent and copyright laws are major sources of

Accepted Answer

A)  natural monopolies.
B)  government-created monopolies.
C)  resource monopolies.
D)  antitrust regulation.E) All of the above
F) B) and D)

Question 16

Table 15-10
The monopolist faces the following demand curve: 
-Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, what is the profit-maximizing level of output?

Accepted Answer

A)  7 units
B)  16 units
C)  23 units
D)  31 unitsE) All of the above
F) A) and B)

Question 17

Antitrust laws have economic benefits that outweigh the costs if they

Accepted Answer

A)  prevent mergers that would decrease competition and lower the costs of production.
B)  prevent mergers that would decrease competition and raise the costs of production.
C)  allow mergers that would decrease competition and raise the costs of production.
D)  None of the above is correct because antitrust laws never have economic benefits that outweigh the costs.E) All of the above
F) A) and C)

Question 18

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

Accepted Answer

A)  Crystal charges a higher price than her competitors for her hair-styling services.
B)  Dan charges a lower price than his competitors for his dry-walling services.
C)  Jackie offers free samples of her loose-meat sandwiches to attract new customers.
D)  Roseanne obtains a copyright for a short story that she wrote and published.E) All of the above
F) B) and C)

Question 19

When deciding what price to charge consumers, the monopolist may choose to charge them different prices based on the customers'

Accepted Answer

A)  geographical location.
B)  age.
C)  income.
D)  All of the above are correct.E) A) and D)
F) B) and C)

Question 20

Table 15-18
A monopolist faces the following demand curve:  Suppose marginal cost is constant at $8 per unit.
-Refer to Table 15-18. The monopolist's total revenue from selling 4 units of output is

Accepted Answer

A)  $4.
B)  $16.
C)  $32.
D)  $48.E) A) and B)
F) All of the above

Exam 15: Monopoly

Table 15-18 A monopolist faces the following demand curve: Suppose marginal cost is constant at $8 per unit. -Refer to Table 15-18. The monopolist's total revenue from selling 4 units of output is

Correct Answer
verified

In order for a firm to maximize profits through price discrimination, the firm must have some market power and be able to prevent arbitrage.

Correct Answer
verified

State one benefit of government-granted monopolies like patents and copyrights.

Correct Answer
verified
increased ...
View Answer

Correct Answer
verified

Patent and copyright laws are major sources of

Correct Answer
verified

Antitrust laws have economic benefits that outweigh the costs if they

Correct Answer
verified

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

Correct Answer
verified

Because a monopolist must lower its price in order to sell another unit of output,

Correct Answer
verified

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $1, how much output should the firm produce in order to equate marginal revenue with marginal cost?

Correct Answer
verified

Monopoly profit is not a social problem because

Correct Answer
verified

Deadweight loss

Correct Answer
verified

The proper level of government intervention is unclear when dealing with a monopoly.

Correct Answer
verified

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost, the government will likely need to subsidize the firm.

Correct Answer
verified

Which of the following formulas would correctly calculate a monopolist's profit?

Correct Answer
verified

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit-maximizing monopolist to take advantage of

Correct Answer
verified

When deciding what price to charge consumers, the monopolist may choose to charge them different prices based on the customers'

Correct Answer
verified

Competitive firms have

Correct Answer
verified

Table 15-10 The monopolist faces the following demand curve: -Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, what is the profit-maximizing level of output?

Correct Answer
verified

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

Correct Answer
verified

Figure 15-4 -Refer to Figure 15-4. The marginal cost curve for a monopoly firm is depicted by curve

Correct Answer
verified

Exam 15: Monopoly

Table 15-18 A monopolist faces the following demand curve: Suppose marginal cost is constant at $8 per unit. -Refer to Table 15-18. The monopolist's total revenue from selling 4 units of output is

Correct AnswerverifiedShow Answer

In order for a firm to maximize profits through price discrimination, the firm must have some market power and be able to prevent arbitrage.

Correct AnswerverifiedShow Answer

State one benefit of government-granted monopolies like patents and copyrights.

Correct Answerverifiedincreased ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Patent and copyright laws are major sources of

Correct AnswerverifiedShow Answer

Antitrust laws have economic benefits that outweigh the costs if they

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Because a monopolist must lower its price in order to sell another unit of output,

Correct AnswerverifiedShow Answer

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $1, how much output should the firm produce in order to equate marginal revenue with marginal cost?

Correct AnswerverifiedShow Answer

Monopoly profit is not a social problem because

Correct AnswerverifiedShow Answer

Deadweight loss

Correct AnswerverifiedShow Answer

The proper level of government intervention is unclear when dealing with a monopoly.

Correct AnswerverifiedShow Answer

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost, the government will likely need to subsidize the firm.

Correct AnswerverifiedShow Answer

Which of the following formulas would correctly calculate a monopolist's profit?

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit-maximizing monopolist to take advantage of

Correct AnswerverifiedShow Answer

When deciding what price to charge consumers, the monopolist may choose to charge them different prices based on the customers'

Correct AnswerverifiedShow Answer

Competitive firms have

Correct AnswerverifiedShow Answer

Table 15-10 The monopolist faces the following demand curve: -Refer to Table 15-10. If the monopolist has total fixed costs of $40 and a constant marginal cost of $5, what is the profit-maximizing level of output?

Correct AnswerverifiedShow Answer

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

Correct AnswerverifiedShow Answer

Figure 15-4 -Refer to Figure 15-4. The marginal cost curve for a monopoly firm is depicted by curve

Correct AnswerverifiedShow Answer

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increased ...
View Answer

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