Question 1

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve.When selling the 100ᵗʰ widget,the firm will always receive

Accepted Answer

A)   less marginal revenue on the 100th widget than it received on the 99th widget.
B)   more average revenue on the 100th widget than it received on the 99th widget.
C)   more total revenue on the 100 widgets than it received on the first 99 widgets.
D)   a lower average cost per unit at 100 units output than at 99 units of output.E) None of the above
F) All of the above

Question 2

Figure 15-15
 
-Refer to Figure 15-15.If there are no fixed costs of production,monopoly profit without price discrimination equals

Accepted Answer

A)   $500.
B)   $1,000.
C)   $2,000.
D)   $4,000.E) C) and D)
F) A) and B)

Question 3

Monopolies are socially inefficient because the price they charge is

Accepted Answer

A)   equal to marginal revenue.
B)   above marginal cost.
C)   equal to demand.
D)   above demand.E) B) and D)
F) B) and C)

Question 4

When a firm experiences continually declining average total costs,

Accepted Answer

A)   the firm is a price taker.
B)   society is better served by having one firm supply the product.
C)   the firm will earn higher profits than if average total costs are increasing.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 5

If a product can be produced by a natural monopoly,society will benefit in the form of lower prices if the monopolist is broken up into several smaller firms.

Accepted Answer

A) True 
 B)False

Question 6

Figure 15-4
 
-Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)   P4 x Q3.
B)   (P4-P2)  x Q3.
C)   (P4-P1)  x Q3.
D)   (P5-P0)  x Q1.E) A) and B)
F) A) and C)

Question 7

When a monopolist increases the amount of output that it produces and sells,average revenue

Accepted Answer

A)   increases, and marginal revenue increases.
B)   increases, and marginal revenue decreases.
C)   decreases, and marginal revenue increases.
D)   decreases, and marginal revenue decreases.E) A) and B)
F) None of the above

Question 8

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6.What is the marginal revenue from the sale of the 4th unit?

Accepted Answer

A)   $-3
B)   $3
C)   $9
D)   $24E) A) and C)
F) None of the above

Question 9

When a natural monopoly exists,it is

Accepted Answer

A)   always cost effective for government-owned firms to produce the product.
B)   never cost effective for one firm to produce the product.
C)   always cost effective for two or more private firms to produce the product.
D)   never cost effective for two or more private firms to produce the product.E) A) and C)
F) B) and C)

Question 10

Table 15-14
The following table gives information on the price, quantity, and total cost of production for a monopolist.
 
-Refer to Table 15-14.At what price does marginal revenue equal marginal cost?

Accepted Answer

A)   $5
B)   $4
C)   $3
D)   $2E) All of the above
F) None of the above

Question 11

The reason to regulate utilities instead of using antitrust laws to promote competition is that a utility is usually a

Accepted Answer

A)   profit-maximizing monopoly.
B)   producer of externalities.
C)   revenue-maximizing monopoly.
D)   natural monopoly.E) A) and B)
F) B) and D)

Question 12

Price discrimination is prohibited by antitrust laws.

Accepted Answer

A) True 
 B)False

Question 13

When a monopolist increases the quantity that it sells,price decreases,which,all else equal,decreases total revenue; this is called the price effect.

Accepted Answer

A) True 
 B)False

Question 14

A rational pricing strategy for a profit-maximizing monopolist is

Accepted Answer

A)   price discrimination.
B)   price segregation.
C)   synergy pricing.
D)   average cost pricing.E) A) and D)
F) B) and C)

Question 15

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Accepted Answer

A) True 
 B)False

Question 16

The socially efficient quantity is found where the demand curve intersects the marginal cost curve.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Accepted Answer

A)   preventing mergers through antitrust laws
B)   regulating the prices that monopolies can charge
C)   doing nothing
D)   None of the above strategies is preferred. Each is a viable strategy.E) A) and D)
F) A) and C)

Question 18

Table 15-9
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 15-9.What is the marginal cost of the 4th unit?

Accepted Answer

A)   $4
B)   $14
C)   $31
D)   $62E) B) and C)
F) None of the above

Question 19

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Accepted Answer

A)   consumer surplus
B)   deadweight loss
C)   market power
D)   arbitrageE) A) and B)
F) A) and C)

Question 20

A profit-maximizing monopolist charges a price of $14.The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7.What is the monopolist's profit?

Accepted Answer

A)   $90
B)   $105
C)   $180
D)   Not enough information is given to determine the answer.E) B) and C)
F) A) and C)

Exam 15: Monopoly.

Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's profit is equal to

Correct AnswerverifiedShow Answer

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Correct AnswerverifiedShow Answer

When a monopolist increases the amount of output that it produces and sells,average revenue

Correct AnswerverifiedShow Answer

When a natural monopoly exists,it is

Correct AnswerverifiedShow Answer

A profit-maximizing monopolist charges a price of $14.The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7.What is the monopolist's profit?

Correct AnswerverifiedShow Answer

The socially efficient quantity is found where the demand curve intersects the marginal cost curve.

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9.What is the marginal cost of the 4th unit?

Correct AnswerverifiedShow Answer

Monopolies are socially inefficient because the price they charge is

Correct AnswerverifiedShow Answer

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve.When selling the 100ᵗʰ widget,the firm will always receive

Correct AnswerverifiedShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.What is the marginal revenue from the sale of the 4th unit?

Correct AnswerverifiedShow Answer

If a product can be produced by a natural monopoly,society will benefit in the form of lower prices if the monopolist is broken up into several smaller firms.

Correct AnswerverifiedShow Answer

Figure 15-15 -Refer to Figure 15-15.If there are no fixed costs of production,monopoly profit without price discrimination equals

Correct AnswerverifiedShow Answer

When a firm experiences continually declining average total costs,

Correct AnswerverifiedShow Answer

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Correct AnswerverifiedShow Answer

A rational pricing strategy for a profit-maximizing monopolist is

Correct AnswerverifiedShow Answer

When a monopolist increases the quantity that it sells,price decreases,which,all else equal,decreases total revenue; this is called the price effect.

Correct AnswerverifiedShow Answer

Price discrimination is prohibited by antitrust laws.

Correct AnswerverifiedShow Answer

A patent gives a single person or firm the exclusive right to sell some good or service forever.

Correct AnswerverifiedShow Answer

Table 15-14 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-14.At what price does marginal revenue equal marginal cost?

Correct AnswerverifiedShow Answer

The reason to regulate utilities instead of using antitrust laws to promote competition is that a utility is usually a

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified