Question 1

Figure 15-5 
-Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)   P2 x Q3.
B)   P2-P4)  x Q3.
C)   P2-P5)  x Q3.
D)   P1-P6)  x Q1.E) B) and D)
F) A) and C)

Question 2

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Accepted Answer

A)   antitrust laws
B)   price discrimination
C)   doing nothing
D)   breaking up a natural monopoly into more than one firmE) None of the above
F) A) and D)

Question 3

Table 15-1
 
-Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

Accepted Answer

A)   4
B)   5
C)   6
D)   8E) A) and D)
F) All of the above

Question 4

Figure 15-1 
-Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Accepted Answer

A)   ownership of a key resource by a single firm
B)   natural monopoly
C)   government-created monopoly
D)   a patent or copyright monopolyE) A) and D)
F) B) and C)

Question 5

The assessment by George Stigler concerning the tradeoffs between "market failure" and "political failure" in the American economy provides support for which of the following solutions to the problems of monopolies?

Accepted Answer

A)   public ownership of monopolies
B)   government regulation of monopolies
C)   government incentives to promote competition in monopolized industries
D)   doing nothing at allE) C) and D)
F) A) and D)

Question 6

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 7

Table 15-1
 
-Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?

Accepted Answer

A)   $17
B)   $21
C)   $23
D)   $26E) A) and D)
F) A) and C)

Question 8

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

Question 9

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) C) and D)
F) All of the above

Question 10

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) B) and D)
F) A) and B)

Question 11

A perfectly price-discriminating monopolist is able to

Accepted Answer

A)   maximize profit and produce a socially-optimal level of output.
B)   maximize profit, but not produce a socially-optimal level of output.
C)   produce a socially-optimal level of output, but not maximize profit.
D)   exercise illegal preferences regarding the race and/or gender of its employees.E) C) and D)
F) None of the above

Question 12

Granting a pharmaceutical company a patent for a new medicine will lead to i)  a product that is priced higher than it would be without the exclusive rights.
Ii)  incentives for pharmaceutical companies to invest in research and development.
Iii)  higher quantities of output than without the patent.

Accepted Answer

A)   i)  and ii)  only
B)   ii)  and iii)  only
C)   i)  and iii)  only
D)   i) , ii) , and iii) E) None of the above
F) A) and B)

Question 13

Figure 15-21 
-Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?

Accepted Answer

A)   ABCE
B)   0HIL
C)   0FGK
D)   None of the above is correct.E) A) and C)
F) B) and C)

Question 14

Figure 15-7 
-Refer to Figure 15-7. In order to maximize profits, the monopolist should produce

Accepted Answer

A)   9 units.
B)   12 units.
C)   15 units.
D)   more than 15 units.E) A) and B)
F) All of the above

Question 15

When a firm's average total cost curve continually declines, the firm is a

Accepted Answer

A)   government-created monopoly.
B)   natural monopoly.
C)   revenue monopoly.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 16

Figure 15-23 
-Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

Accepted Answer

The answer of Figure 15-23 
-Refer to Figure 15-23. If...

Question 17

In a competitive market, a firm's supply curve dictates the amount it will supply. In a monopoly market the

Accepted Answer

A)   same is true.
B)   supply curve conceptually makes sense, but in practice is never used.
C)   supply curve will have limited predictive capacity.
D)   decision about how much to supply is impossible to separate from the demand curve it faces.E) B) and D)
F) B) and C)

Exam 14: Monopoly

When a firm's average total cost curve continually declines, the firm is a

Correct Answer
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The assessment by George Stigler concerning the tradeoffs between "market failure" and "political failure" in the American economy provides support for which of the following solutions to the problems of monopolies?

Correct Answer
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Table 15-1 -Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

Correct Answer
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Correct Answer
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In a competitive market, a firm's supply curve dictates the amount it will supply. In a monopoly market the

Correct Answer
verified

Table 15-1 -Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?

Correct Answer
verified

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

Correct Answer
verified

Granting a pharmaceutical company a patent for a new medicine will lead to i) a product that is priced higher than it would be without the exclusive rights. Ii) incentives for pharmaceutical companies to invest in research and development. Iii) higher quantities of output than without the patent.

Correct Answer
verified

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Correct Answer
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Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Correct Answer
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A perfectly price-discriminating monopolist is able to

Correct Answer
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Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

Correct Answer
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Figure 15-21 -Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?

Correct Answer
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A rational pricing strategy for a profit-maximizing monopolist is

Correct Answer
verified

Figure 15-7 -Refer to Figure 15-7. In order to maximize profits, the monopolist should produce

Correct Answer
verified

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

Correct Answer
verified

Monopolies are socially inefficient because the price they charge is

Correct Answer
verified

Exam 14: Monopoly

When a firm's average total cost curve continually declines, the firm is a

Correct AnswerverifiedShow Answer

The assessment by George Stigler concerning the tradeoffs between "market failure" and "political failure" in the American economy provides support for which of the following solutions to the problems of monopolies?

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a competitive market, a firm's supply curve dictates the amount it will supply. In a monopoly market the

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?

Correct AnswerverifiedShow Answer

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to

Correct AnswerverifiedShow Answer

Granting a pharmaceutical company a patent for a new medicine will lead to i) a product that is priced higher than it would be without the exclusive rights. Ii) incentives for pharmaceutical companies to invest in research and development. Iii) higher quantities of output than without the patent.

Correct AnswerverifiedShow Answer

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Correct AnswerverifiedShow Answer

A perfectly price-discriminating monopolist is able to

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Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, how much profit will it earn?

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Figure 15-21 -Refer to Figure 15-21. Which of the following areas describes the profit of this natural monopolist under socially optimal pricing?

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A rational pricing strategy for a profit-maximizing monopolist is

Correct AnswerverifiedShow Answer

Figure 15-7 -Refer to Figure 15-7. In order to maximize profits, the monopolist should produce

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Monopolies are socially inefficient because the price they charge is

Correct AnswerverifiedShow Answer

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