Question 1

When the marginal revenue curve is drawn for a monopolist, the curve

Accepted Answer

A)  ​is above the monopolist's demand curve initially and then falls below the demand curve.
B)  ​is above the monopolist's demand curve for all output levels.
C)  is equal to the monopolist's demand curve at all output levels.
D)  ​is below the monopolist's demand curve, beyond the initial unit produced.E) All of the above
F) B) and D)

Question 2

Suppose ABC Aluminum Inc. owns 80% of the world's bauxite, a mineral used in the production of aluminum. Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Accepted Answer

A)  monopoly resources
B)  government regulation
C)  the production process
D)  Both a and b are correct.E) None of the above
F) All of the above

Question 3

Figure 15-5 
-Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Accepted Answer

A)  P1.
B)  P2.
C)  P3.
D)  P4.E) B) and C)
F) A) and C)

Question 4

When a firm has a natural monopoly, the firm's

Accepted Answer

A)  marginal cost always exceeds its average total cost.
B)  total cost curve is horizontal.
C)  average total cost curve is downward sloping.
D)  marginal cost curve must lie above the firm's average total cost curve.E) C) and D)
F) None of the above

Question 5

A monopoly creates a deadweight loss to society because it produces less output than the socially efficient level.

Accepted Answer

A) True 
 B)False

Question 6

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) All of the above
F) None of the above

Question 7

Scenario 15-4
Suppose a monopolist has a demand curve that can be expressed as P=90-Q. The monopolist's marginal revenue curve can be expressed as MR=90-2Q. The monopolist has constant marginal costs and average total costs of $10.
-Refer to Scenario 15-4. The profit-maximizing monopolist will produce an output level of

Accepted Answer

A)  80 units.
B)  40 units.
C)  20 units.
D)  10 units.E) A) and B)
F) A) and C)

Question 8

​Since monopolists that practice price discrimination generally increase market output, compared to a monopoly that charges a single price, practicing price discrimination generally leads to a smaller deadweight loss.

Accepted Answer

A) True 
 B)False

Question 9

Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing quantity is 40 units, the profit-maximizing price is $160, and the marginal cost of the 40th unit is $120. If the good were produced in a perfectly competitive market, the equilibrium quantity would be 50, and the equilibrium price would be $150. The demand curve and marginal cost curves are linear. What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)  $40
B)  $100
C)  $200
D)  $400E) A) and C)
F) None of the above

Question 10

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151st unit of output is

Accepted Answer

A)  -$6.98.
B)  -$0.02.
C)  $2.45.
D)  $6.98.E) B) and D)
F) A) and B)

Question 11

Figure 15-7 
-Refer to Figure 15-7. A profit-maximizing monopolist would incur total costs of

Accepted Answer

A)  $81.
B)  $120.
C)  $144.
D)  $240.E) B) and D)
F) A) and B)

Question 12

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Accepted Answer

A)  consumer surplus.
B)  consumer benefit.
C)  price discriminant.
D)  deadweight loss.E) A) and C)
F) B) and C)

Question 13

Exclusive ownership of a key resource

Accepted Answer

A)  is the most common cause of a monopoly.
B)  is a potential but rare cause of a monopoly.
C)  explains the monopoly ownership of the US Postal Service.
D)  explains why a single firm distributes water to a community.E) All of the above
F) A) and B)

Question 14

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. 
-Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Accepted Answer

A)  ​56 units.
B)  ​35 units.
C)  ​40 units.
D)  ​None of these, since a monopoly does not have a supply curve.E) B) and C)
F) A) and B)

Question 15

Drug companies are allowed to be monopolists in the drugs they discover in order to

Accepted Answer

A)  allow drug companies to charge a price that is equal to their marginal cost.
B)  discourage new firms from entering the drug market.
C)  allow the government to earn patent revenue.
D)  None of the above is correct.E) All of the above
F) C) and D)

Question 16

Most firms have

Accepted Answer

A)  no monopoly pricing power.
B)  some monopoly pricing power.
C)  absolute monopoly pricing power.
D)  the ability to earn monopoly profits.E) B) and C)
F) C) and D)

Question 17

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Accepted Answer

A)  resource monopolies.
B)  natural monopolies.
C)  government-created monopolies.
D)  breaking up monopolies into smaller firms.E) All of the above
F) A) and D)

Question 18

Table 15-19
A monopolist faces the following demand curve: 
-Refer to Table 15-19. If a 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) None of the above
F) B) and C)

Question 19

The supply curve for the monopolist

Accepted Answer

A)  is horizontal.
B)  is vertical.
C)  is upward sloping.
D)  does not exist.E) A) and C)
F) A) and B)

Question 20

Figure 15-7 
-Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of

Accepted Answer

A)  $81.
B)  $144.
C)  $225.
D)  $240.E) A) and B)
F) A) and C)

Exam 15: Monopoly

A monopoly creates a deadweight loss to society because it produces less output than the socially efficient level.

Correct Answer
verified

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would incur total costs of

Correct Answer
verified

Suppose ABC Aluminum Inc. owns 80% of the world's bauxite, a mineral used in the production of aluminum. Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

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 $3, how much output should the firm produce?

Correct Answer
verified

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Correct Answer
verified

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of

Correct Answer
verified

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

Correct Answer
verified

Most firms have

Correct Answer
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Exclusive ownership of a key resource

Correct Answer
verified

When the marginal revenue curve is drawn for a monopolist, the curve

Correct Answer
verified

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Correct Answer
verified

Since monopolists that practice price discrimination generally increase market output, compared to a monopoly that charges a single price, practicing price discrimination generally leads to a smaller deadweight loss.

Correct Answer
verified

Drug companies are allowed to be monopolists in the drugs they discover in order to

Correct Answer
verified

Correct Answer
verified

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Correct Answer
verified

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151^st unit of output is

Correct Answer
verified

The supply curve for the monopolist

Correct Answer
verified

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Correct Answer
verified

When a firm has a natural monopoly, the firm's

Correct Answer
verified

Correct Answer
verified

Exam 15: Monopoly

A monopoly creates a deadweight loss to society because it produces less output than the socially efficient level.

Correct AnswerverifiedShow Answer

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would incur total costs of

Correct AnswerverifiedShow Answer

Suppose ABC Aluminum Inc. owns 80% of the world's bauxite, a mineral used in the production of aluminum. Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

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 $3, how much output should the firm produce?

Correct AnswerverifiedShow Answer

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Correct AnswerverifiedShow Answer

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of

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

Most firms have

Correct AnswerverifiedShow Answer

Exclusive ownership of a key resource

Correct AnswerverifiedShow Answer

When the marginal revenue curve is drawn for a monopolist, the curve

Correct AnswerverifiedShow Answer

Consumers' willingness to pay for a good minus the amount they actually pay for it equals

Correct AnswerverifiedShow Answer

​Since monopolists that practice price discrimination generally increase market output, compared to a monopoly that charges a single price, practicing price discrimination generally leads to a smaller deadweight loss.

Correct AnswerverifiedShow Answer

Drug companies are allowed to be monopolists in the drugs they discover in order to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Correct AnswerverifiedShow Answer

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151st unit of output is

Correct AnswerverifiedShow Answer

The supply curve for the monopolist

Correct AnswerverifiedShow Answer

​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Correct AnswerverifiedShow Answer

When a firm has a natural monopoly, the firm's

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Since monopolists that practice price discrimination generally increase market output, compared to a monopoly that charges a single price, practicing price discrimination generally leads to a smaller deadweight loss.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151^st unit of output is

Correct Answer
verified

Correct Answer
verified

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. If we want to plot the supply curve for Bearclaws, what is the lowest output that it would produce?

Correct Answer
verified

Correct Answer
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Correct Answer
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