Question 1

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community.If TWC is left unregulated,how many households in Oakland are served?

Accepted Answer

A)   20,000
B)   30,000
C)   40,000
D)   50,000
E)   10,000 A

Question 2

A single-price monopoly can sell 1 unit for $9.00.To sell 2 units,the price must be $8.50 per unit.The marginal revenue from selling the second unit is

Accepted Answer

A)   $17.50.
B)   $17.00.
C)   $8.50.
D)   $8.00.
E)   $9.00

Question 3

When a natural monopoly is regulated using a marginal cost pricing rule,what can you say about the firm's profit and the market's efficiency?

Accepted Answer

Using a marginal cost pricing ...

Question 4

A single-price monopoly can sell 2 units for $8.50 per unit.In order to sell 3 units,the price must be $8.00 per unit.The marginal revenue from selling the third unit is

Accepted Answer

A)   $24.00.
B)   $8.50.
C)   $7.00.
D)   $6.50.
E)   $17.00.

Question 5

Which of the following statements is correct?

Accepted Answer

A)   Any firm can price discriminate.
B)   Only firms that sell high-priced products can price discriminate.
C)   In order to price discriminate, a firm must sell a good or service that cannot be resold.
D)   In order to price discriminate, the firms must sell a low-priced product.
E)   Price discrimination is always illegal.

Question 6

To be able to price discriminate,a firm must

Accepted Answer

A)   lower prices for all customers.
B)   raise prices for all customers.
C)   be able to identify and separate different types of buyers.
D)   sell a product that can be resold.
E)   Both answers B and C are correct.

Question 7

Electric utilities are often considered natural monopolies and are regulated.When would the price be highest: when the utility is not regulated,when it is regulated using an average cost pricing rule,or when it is regulated using a marginal cost pricing rule? When would its price be lowest?

Accepted Answer

The price would be highest if ...

Question 8

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the amount of food produced

Accepted Answer

A)   remains constant.
B)   decreases.
C)   increases.
D)   might increase or decrease depending on whether the demand for food is elastic or inelastic.
E)   might increase or decrease depending on whether the monopoly's marginal revenue curve lies below or above its demand curve.

Question 9

Quantity  (units)   Price  (dollars per unit)  182736455463\begin{array} { | c | c | } \hline \begin{array} { c } 	ext { Quantity } \	ext { (units)  }\end{array} & \begin{array} { c } 	ext { Price } \	ext { (dollars per unit)  }\end{array} \\hline 1 & 8 \\hline 2 & 7 \\hline 3 & 6 \\hline 4 & 5 \\hline 5 & 4 \\hline 6 & 3 \\hline\end{array} Quantity  (units)  ​123456​ Price  (dollars per unit)  ​876543​​ 
-The table above gives the demand for a monopolist's output.Between which two quantities is marginal revenue equal to 0?

Accepted Answer

A)   4 and 5
B)   3 and 4
C)   2 and 3
D)   1 and 2  A

Question 10

If a regulatory agency sets the price equal to marginal cost for a natural monopoly,the

Accepted Answer

A)   government might have to provide a subsidy to the firm to keep it in business.
B)   price is the same as the unregulated monopoly price.
C)   firm makes an economic profit, though not the maximum economic profit.
D)   firm makes the maximum economic profit.
E)   firm makes zero economic profit.

Question 11

One of the requirements for a monopoly is that

Accepted Answer

A)   products are high priced.
B)   there are several close substitutes for the product.
C)   there is a product with no close substitutes.
D)   the product cannot be produced by small firms.
E)   there is no barrier to entry.

Question 12

If Microsoft is a monopoly and currently charges prices where its demand is elastic,then Microsoft's marginal revenue is

Accepted Answer

A)   negative.
B)   positive.
C)   zero.
D)   minimized.
E)   undefined.

Question 13

The key idea behind price discrimination is to convert consumer surplus into

Accepted Answer

A)   a barrier to entry.
B)   economic profit.
C)   deadweight loss.
D)   monopoly power.
E)   total cost.

Question 14

Comparing a perfectly competitive market to a single-price monopoly with the same costs,we see that

Accepted Answer

A)   both markets are equally efficient in their use of resources.
B)   the monopoly market always is more efficient in the use of resources.
C)   the perfectly competitive market achieves efficiency in resource use while the monopoly market does not.
D)   the monopoly market achieves efficiency in resource use while perfectly competitive market does not.
E)   None of the above answers is correct because comparing a perfectly competitive market to a monopoly is impossible.

Question 15

Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.

Accepted Answer

Marginal cost pricing sets the price equ...

Question 16

Firms that can effectively price discriminate

Accepted Answer

A)   can be either perfectly competitive firms or monopolies.
B)   can prevent the resale of their products.
C)   have only one class of buyers, buyers willing to pay a high price.
D)   Both answers A and B are correct.
E)   Both answers A and C are correct.

Question 17

For a regulated natural monopoly,the marginal cost pricing rule is a rule that sets price ________ marginal cost and achieves an ________ amount of output.

Accepted Answer

A)   equal to; efficient
B)   above; inefficient
C)   below; efficient
D)   equal to; inefficient
E)   above; efficient

Question 18

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect?

Accepted Answer

The statement is incorrect.If a firm is regulated using a marginal cost pricing rule,the firm incurs an economic loss.

Question 19

If a firm is able to convert every dollar of consumer surplus to economic profit,the firm has achieved

Accepted Answer

A)   discrimination among units of a good.
B)   discrimination between groups of buyers.
C)   perfect price discrimination.
D)   perfect cost minimization.
E)   the normal amount of economic profit.

Question 20

Allegiant Air holds a natural monopoly on most of the routes it serves in the United States.Allegiant Air's marginal revenue will ________ when its total revenue ________.

Accepted Answer

A)   equal $0; is maximized
B)   be negative; is maximized
C)   be positive; is maximized
D)   inelastic; is increasing
E)   elastic; is increasing

Exam 16: Monopoly

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community.If TWC is left unregulated,how many households in Oakland are served?

Correct Answer
verified
A

A single-price monopoly can sell 1 unit for $9.00.To sell 2 units,the price must be $8.50 per unit.The marginal revenue from selling the second unit is

Correct Answer
verified

When a natural monopoly is regulated using a marginal cost pricing rule,what can you say about the firm's profit and the market's efficiency?

Correct Answer
verified
Using a marginal cost pricing ...
View Answer

A single-price monopoly can sell 2 units for $8.50 per unit.In order to sell 3 units,the price must be $8.00 per unit.The marginal revenue from selling the third unit is

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

To be able to price discriminate,a firm must

Correct Answer
verified

Electric utilities are often considered natural monopolies and are regulated.When would the price be highest: when the utility is not regulated,when it is regulated using an average cost pricing rule,or when it is regulated using a marginal cost pricing rule? When would its price be lowest?

Correct Answer
verified
The price would be highest if ...
View Answer

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the amount of food produced

Correct Answer
verified

Correct Answer
verified
A

If a regulatory agency sets the price equal to marginal cost for a natural monopoly,the

Correct Answer
verified

One of the requirements for a monopoly is that

Correct Answer
verified

If Microsoft is a monopoly and currently charges prices where its demand is elastic,then Microsoft's marginal revenue is

Correct Answer
verified

The key idea behind price discrimination is to convert consumer surplus into

Correct Answer
verified

Comparing a perfectly competitive market to a single-price monopoly with the same costs,we see that

Correct Answer
verified

Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.

Correct Answer
verified
Marginal cost pricing sets the price equ...
View Answer

Firms that can effectively price discriminate

Correct Answer
verified

For a regulated natural monopoly,the marginal cost pricing rule is a rule that sets price marginal cost and achieves an amount of output.

Correct Answer
verified

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect?

Correct Answer
verified
The statement is incorrect.If a firm is regulated using a marginal cost pricing rule,the firm incurs an economic loss.

If a firm is able to convert every dollar of consumer surplus to economic profit,the firm has achieved

Correct Answer
verified

Allegiant Air holds a natural monopoly on most of the routes it serves in the United States.Allegiant Air's marginal revenue will when its total revenue .

Correct Answer
verified

Exam 16: Monopoly

-The above figure represents the market for cable television in Oakland,Florida.Time Warner Communications (TWC) is the sole provider of cable television to the residents of this Central Florida community.If TWC is left unregulated,how many households in Oakland are served?

Correct AnswerverifiedA

A single-price monopoly can sell 1 unit for $9.00.To sell 2 units,the price must be $8.50 per unit.The marginal revenue from selling the second unit is

Correct AnswerverifiedShow Answer

When a natural monopoly is regulated using a marginal cost pricing rule,what can you say about the firm's profit and the market's efficiency?

Correct AnswerverifiedUsing a marginal cost pricing ...View AnswerShow Answer

A single-price monopoly can sell 2 units for $8.50 per unit.In order to sell 3 units,the price must be $8.00 per unit.The marginal revenue from selling the third unit is

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

To be able to price discriminate,a firm must

Correct AnswerverifiedShow Answer

Electric utilities are often considered natural monopolies and are regulated.When would the price be highest: when the utility is not regulated,when it is regulated using an average cost pricing rule,or when it is regulated using a marginal cost pricing rule? When would its price be lowest?

Correct AnswerverifiedThe price would be highest if ...View AnswerShow Answer

Assume someone organizes all farms in the nation into a single-price monopoly.As a result,the amount of food produced

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

If a regulatory agency sets the price equal to marginal cost for a natural monopoly,the

Correct AnswerverifiedShow Answer

One of the requirements for a monopoly is that

Correct AnswerverifiedShow Answer

If Microsoft is a monopoly and currently charges prices where its demand is elastic,then Microsoft's marginal revenue is

Correct AnswerverifiedShow Answer

The key idea behind price discrimination is to convert consumer surplus into

Correct AnswerverifiedShow Answer

Comparing a perfectly competitive market to a single-price monopoly with the same costs,we see that

Correct AnswerverifiedShow Answer

Compare and contrast the marginal cost and average cost pricing rules for regulating natural monopolies.

Correct AnswerverifiedMarginal cost pricing sets the price equ...View AnswerShow Answer

Firms that can effectively price discriminate

Correct AnswerverifiedShow Answer

For a regulated natural monopoly,the marginal cost pricing rule is a rule that sets price ________ marginal cost and achieves an ________ amount of output.

Correct AnswerverifiedShow Answer

"If a natural monopoly is regulated using a marginal cost pricing rule,the firm makes zero economic profit." Is the previous statement correct or incorrect?

Correct AnswerverifiedThe statement is incorrect.If a firm is regulated using a marginal cost pricing rule,the firm incurs an economic loss.

If a firm is able to convert every dollar of consumer surplus to economic profit,the firm has achieved

Correct AnswerverifiedShow Answer

Allegiant Air holds a natural monopoly on most of the routes it serves in the United States.Allegiant Air's marginal revenue will ________ when its total revenue ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified
Using a marginal cost pricing ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The price would be highest if ...
View Answer

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Marginal cost pricing sets the price equ...
View Answer

Correct Answer
verified

For a regulated natural monopoly,the marginal cost pricing rule is a rule that sets price marginal cost and achieves an amount of output.

Correct Answer
verified

Correct Answer
verified
The statement is incorrect.If a firm is regulated using a marginal cost pricing rule,the firm incurs an economic loss.

Correct Answer
verified

Allegiant Air holds a natural monopoly on most of the routes it serves in the United States.Allegiant Air's marginal revenue will when its total revenue .

Correct Answer
verified