Question 1

University financial aid can be viewed as a type of price discrimination.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements comparing monopoly with competition is correct?

Accepted Answer

A)   A monopolist produces a higher level of output and charges a lower price than a competitive firm would.
B)   With perfect price discrimination,the total surplus under monopoly can be the same as under competition.
C)   With or without price discrimination,the consumer surplus under monopoly is at least as large as it would be under competition.
D)   The deadweight loss associated with monopoly is caused by the positive economic profits of the monopolist;competitive firms do not earn a positive economic profit so there is no deadweight loss under competition.E) All of the above
F) B) and C)

Question 3

One solution to the problems of marginal-cost pricing of a regulated natural monopolist is average cost pricing.In this model,the monopolist is allowed to price its production at average total cost.How does average-cost pricing differ from marginal-cost pricing? Does this solution maximize social well-being?

Accepted Answer

Under average-cost pricing,the monopolis...

Question 4

Price discrimination is a rational strategy for a profit-maximizing monopolist when

Accepted Answer

A)   the monopolist finds itself able to produce only limited quantities of output.
B)   consumers are unable to be segmented into identifiable markets.
C)   the monopolist wishes to increase the deadweight loss that results from profit-maximizing behavior.
D)   there is no opportunity for arbitrage across market segments.E) B) and C)
F) All of the above

Question 5

Splitting up a monopoly is often justified on the grounds that

Accepted Answer

A)   consumers prefer dealing with small firms.
B)   small firms have lower costs.
C)   competition is inherently efficient.
D)   nationalization is a less-preferred option.E) C) and D)
F) All of the above

Question 6

Suppose a profit-maximizing monopolist faces a constant marginal cost of $10,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 $4,000.

Accepted Answer

A) True 
 B)False

Question 7

Authors are allowed to be monopolists in the sale of their books in order to

Accepted Answer

A)   encourage authors to write more and better books.
B)   correct for the negative externalities that the Internet and television impose.
C)   satisfy literary advocacy groups that exercise their lobbying power.
D)   promote a society in which people think for themselves and learn from whichever books they please.E) All of the above
F) A) and B)

Question 8

Figure 15-9 
-Refer to Figure 15-9.What area measures the deadweight loss?

Accepted Answer

A)   (B-F) *K
B)   0.5[(P-O) *(L-O) ]
C)   0.5[(A-H) *(L-J) ]
D)   0.5[(B-F) *(L-K) ]E) All of the above
F) B) and D)

Question 9

During the holiday season,high-end retailers frequently place a high price on merchandise on weekends and discount the price during the week.They do this because they believe that two groups of customers exist: shoppers with little free time and bargain hunters.Bargain hunters have time to shop around and frequently shop during the week.What do economists call this price strategy used by high-end retailers?

Accepted Answer

A)   oligopoly
B)   price discrimination
C)   compensating differential
D)   in-kind transfersE) A) and B)
F) A) and C)

Question 10

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) A) and D)
F) C) and D)

Question 11

If the distribution of water is a natural monopoly,then

Accepted Answer

A)   (i) and (ii) only
B)   (ii) and (iii) only
C)   (i) and (iii) only
D)   (iii) onlyE) B) and D)
F) A) and B)

Question 12

The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?

Accepted Answer

A)   marginal cost and demand
B)   marginal cost and marginal revenue
C)   average total cost and marginal revenue
D)   average variable cost and average revenueE) A) and B)
F) C) and D)

Question 13

The following table shows quantity,price,and marginal cost information for a monopoly.What price should the firm charge to maximize its profit?

Accepted Answer

A)   $4
B)   $5
C)   $6
D)   $7E) A) and D)
F) A) and C)

Question 14

In order for antitrust laws to raise social welfare,the government must

Accepted Answer

A)   disallow synergy benefits from accruing to monopolists.
B)   disallow any mergers from taking place.
C)   be able to determine which mergers are desirable and which are not.
D)   always attempt to keep markets in their most competitive form.E) C) and D)
F) A) and C)

Question 15

Table 15-5
 
-Refer to Table 15-5.If the monopolist faces a constant marginal cost of $1,how much output should the firm produce?

Accepted Answer

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

Question 16

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) B) and D)
F) None of the above

Question 17

What are the four ways that government policymakers can respond to the problem of monopoly?

Accepted Answer

First,the government can try to make mon...

Question 18

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) None of the above
F) C) and D)

Question 19

Table 15-5
 
-Refer to Table 15-5.If the monopolist faces a constant marginal cost of $3,how much output should the firm produce?

Accepted Answer

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

Question 20

Because a monopolist is the sole producer in its market,it can necessarily alter the price of its good

Accepted Answer

A)   (ii) only
B)   (iii) only
C)   (i) and (ii) only
D)   (ii) and (iii) onlyE) A) and D)
F) A) and B)

Exam 15: Monopoly

Correct Answer
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Which of the following statements comparing monopoly with competition is correct?

Correct Answer
verified

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

Correct Answer
verified

Authors are allowed to be monopolists in the sale of their books in order to

Correct Answer
verified

Correct Answer
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Under average-cost pricing,the monopolis...
View Answer

Splitting up a monopoly is often justified on the grounds that

Correct Answer
verified

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 Answer
verified

Figure 15-9 -Refer to Figure 15-9.What area measures the deadweight loss?

Correct Answer
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The following table shows quantity,price,and marginal cost information for a monopoly.What price should the firm charge to maximize its profit?

Correct Answer
verified

Because a monopolist is the sole producer in its market,it can necessarily alter the price of its good

Correct Answer
verified

In order for antitrust laws to raise social welfare,the government must

Correct Answer
verified

What are the four ways that government policymakers can respond to the problem of monopoly?

Correct Answer
verified
First,the government can try to make mon...
View Answer

The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?

Correct Answer
verified

If the distribution of water is a natural monopoly,then

Correct Answer
verified

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

Correct Answer
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Table 15-5 -Refer to Table 15-5.If the monopolist faces a constant marginal cost of $1,how much output should the firm produce?

Correct Answer
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University financial aid can be viewed as a type of price discrimination.

Correct Answer
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Table 15-5 -Refer to Table 15-5.If the monopolist faces a constant marginal cost of $3,how much output should the firm produce?

Correct Answer
verified

Price discrimination is a rational strategy for a profit-maximizing monopolist when

Correct Answer
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Exam 15: Monopoly

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Which of the following statements comparing monopoly with competition is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Authors are allowed to be monopolists in the sale of their books in order to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedUnder average-cost pricing,the monopolis...View AnswerShow Answer

Splitting up a monopoly is often justified on the grounds that

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

Figure 15-9 -Refer to Figure 15-9.What area measures the deadweight loss?

Correct AnswerverifiedShow Answer

The following table shows quantity,price,and marginal cost information for a monopoly.What price should the firm charge to maximize its profit?

Correct AnswerverifiedShow Answer

Because a monopolist is the sole producer in its market,it can necessarily alter the price of its good

Correct AnswerverifiedShow Answer

In order for antitrust laws to raise social welfare,the government must

Correct AnswerverifiedShow Answer

What are the four ways that government policymakers can respond to the problem of monopoly?

Correct AnswerverifiedFirst,the government can try to make mon...View AnswerShow Answer

The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?

Correct AnswerverifiedShow Answer

If the distribution of water is a natural monopoly,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Table 15-5 -Refer to Table 15-5.If the monopolist faces a constant marginal cost of $1,how much output should the firm produce?

Correct AnswerverifiedShow Answer

University financial aid can be viewed as a type of price discrimination.

Correct AnswerverifiedShow Answer

Table 15-5 -Refer to Table 15-5.If the monopolist faces a constant marginal cost of $3,how much output should the firm produce?

Correct AnswerverifiedShow Answer

Price discrimination is a rational strategy for a profit-maximizing monopolist when

Correct AnswerverifiedShow Answer

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Under average-cost pricing,the monopolis...
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Correct Answer
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First,the government can try to make mon...
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Correct Answer
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Correct Answer
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