Question 1

When setting prices, the monopolist may choose to charge alternative customers different prices based on:

Accepted Answer

A)  geographical location.
B)  age.
C)  income.
D)  all of the above.

Question 2

Figure 8-D 1P4 E) DBQ3Q1" class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 8-D.Identify the area of the welfare loss due to monopoly pricing and output practices.

Accepted Answer

A)  ACDB
B)  DCB
C)  ACB
D)  DAP1P4
E)  DBQ3Q1

Question 3

A price-discriminating monopolist will tend to charge a higher price to senior citizens if it believes that senior citizens:

Accepted Answer

A)  have a lower willingness to pay than other demanders.
B)  have a greater willingness to pay than other demanders.
C)  have very elastic demand curves.
D)  have horizontal demand curves.

Question 4

A key element to preserving a monopoly is:

Accepted Answer

A)  government subsidization of critical enterprises.
B)  keeping potential rivals out of the market.
C)  guaranteeing the availability of substitute products.
D)  increased advertising expenditures.

Question 5

What is the maximum amount of profit that the firm below could generate?

Accepted Answer

A)  -$2,800
B)  $2,400
C)  $2,480
D)  $2,880
E)  $5,280

Question 6

Which of the following is true of successful price discriminators?

Accepted Answer

A)  They make greater profits than by charging everyone a uniform price
B)  Their customers must have different willingness to pay.
C)  Their customers must have difficulty reselling the good to other customers.
D)  They must have some monopoly power.
E)  All of the above are true of successful price discriminators

Question 7

Table 8-A
   Quantity  Total Revenue  Total Cost 8959091059310114981112210512129114\begin{array} { c c c } 	ext { Quantity } & 	ext { Total Revenue } & 	ext { Total Cost } \8 & 95 & 90 \9 & 105 & 93 \10 & 114 & 98 \11 & 122 & 105 \12 & 129 & 114\end{array} Quantity 89101112​ Total Revenue 95105114122129​ Total Cost 909398105114​ 
-Refer to Table 8-A.Average total cost at the profit-maximizing level of output is equal to:

Accepted Answer

A)  $9.55.
B)  $9.80.
C)  $10.33.
D)  $11.25.
E)  none of the above.

Question 8

"Monopolists do not worry about efficient production and cost saving since they can just pass along any increase in costs to their consumers." Is this statement true? Explain your answer.

Accepted Answer

This statement is not True. An...

Question 9

Figure 9-I
 
-A natural monopoly exists when one large firm can produce a product at a lower per unit cost than can smaller firms.

Accepted Answer

A) True 
 B)False

Question 10

Ceteris paribus, in which of the following cases would we expect economic profits to be greatest?

Accepted Answer

A)  an unregulated monopolist who is able to price discriminate.
B)  an unregulated monopolist who is unable to price discriminate.
C)  a regulated monopolist required to charge a price no greater than marginal cost.
D)  a regulated monopolist required to charge a price no greater than average cost.

Question 11

Figure 8-C
The following diagram contains information on cost and revenue curves facing a regulated monopoly. 
-Refer to Figure 8-C.If regulators set a price according to marginal-cost pricing, the firm will:

Accepted Answer

A)  earn positive economic profits.
B)  make zero economic profits.
C)  suffer an economic loss.
D)  earn the same level of profits as it would absent regulation.

Question 12

Which of the following is a problem with government regulation of natural monopolies?

Accepted Answer

A)  creation of excessive profits levels
B)  reduced incentives to cut costs
C)  decreased number of firms in the market
D)  lack of influence from special interest groups

Question 13

Which of the following is true of monopoly but not true of perfect competition?

Accepted Answer

A)  Firms can potentially earn economic profits in the short run.
B)  Total revenue is the product of price times the quantity sold.
C)  Firms can potentially earn economic profits in the long run.
D)  A profit-maximizing firm will shut down if price falls below the average variable cost.

Question 14

Which of the following is not a source of monopoly?

Accepted Answer

A)  technologies that allow each of many small firms to produce at the same per-unit costs as one large firm
B)  patents
C)  control of crucial inputs
D)  government licensing requirements

Question 15

If a firm seeks to maximize profits, it should produce the quantity where:

Accepted Answer

A)  marginal revenue equals zero.
B)  elasticity of demand is less than one.
C)  elasticity of demand is greater than one.
D)  marginal revenue is maximized.
E)  average total cost is minimized.

Question 16

At a given output level, a monopolist earns a profit only if:

Accepted Answer

A)  the slope of the total revenue curve exceeds the slope of the total cost curve.
B)  the height of the marginal revenue curve at the output produced exceeds the height of the marginal cost curve at that output.
C)  the height of the demand curve at the output produced exceeds the height of the marginal revenue curve at that output.
D)  the height of the demand curve at the output produced exceeds the height of the average total cost curve at that output.

Question 17

A monopoly firm will earn economic profits whenever:

Accepted Answer

A)  marginal revenue exceeds marginal cost.
B)  marginal revenue equals marginal cost.
C)  marginal revenue is less than marginal cost.
D)  marginal revenue is greater than average cost.
E)  average revenue is greater than average cost.

Question 18

Figure 8-A 1. B) 0BFQ2. C) 0ADQ1. D) CADE. E) 0CGQ3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 8-A.The profit-maximizing firm's total revenue is indicated in the diagram as area:

Accepted Answer

A)  0CEQ1.
B)  0BFQ2.
C)  0ADQ1.
D)  CADE.
E)  0CGQ3.

Question 19

Patents are currently granted for a period of 20 years in the United States.Do you think that time period is too long or too short? Explain your reasoning.

Accepted Answer

Answers will vary, but should ...

Question 20

Figure 9-I
 
-Which of the following is a characteristic of a monopoly?

Accepted Answer

A)  a large number of sellers
B)  homogeneous products
C)  larger barriers to entry
D)  price taking firms

Exam 8: Monopoly

A monopoly firm will earn economic profits whenever:

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At a given output level, a monopolist earns a profit only if:

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Patents are currently granted for a period of 20 years in the United States.Do you think that time period is too long or too short? Explain your reasoning.

Correct AnswerverifiedAnswers will vary, but should ...View AnswerShow Answer

A key element to preserving a monopoly is:

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A price-discriminating monopolist will tend to charge a higher price to senior citizens if it believes that senior citizens:

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Figure 8-C The following diagram contains information on cost and revenue curves facing a regulated monopoly. -Refer to Figure 8-C.If regulators set a price according to marginal-cost pricing, the firm will:

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Which of the following is not a source of monopoly?

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Which of the following is true of successful price discriminators?

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What is the maximum amount of profit that the firm below could generate?

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Figure 9-I -A natural monopoly exists when one large firm can produce a product at a lower per unit cost than can smaller firms.

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Ceteris paribus, in which of the following cases would we expect economic profits to be greatest?

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Figure 9-I -Which of the following is a characteristic of a monopoly?

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When setting prices, the monopolist may choose to charge alternative customers different prices based on:

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"Monopolists do not worry about efficient production and cost saving since they can just pass along any increase in costs to their consumers." Is this statement true? Explain your answer.

Correct AnswerverifiedThis statement is not True. An...View AnswerShow Answer

Which of the following is a problem with government regulation of natural monopolies?

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Figure 8-A -Refer to Figure 8-A.The profit-maximizing firm's total revenue is indicated in the diagram as area:

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Which of the following is true of monopoly but not true of perfect competition?

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If a firm seeks to maximize profits, it should produce the quantity where:

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Figure 8-D -Refer to Figure 8-D.Identify the area of the welfare loss due to monopoly pricing and output practices.

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