Question 1

Goods that do not have close substitutes have downward-sloping demand curves.

Accepted Answer

A) True 
 B)False

Question 2

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Accepted Answer

A)   A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost.
B)   A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at the point where average revenue exceeds marginal cost.
C)   For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-maximizing level of output is smaller than it is for larger levels of output.
D)   For a profit-maximizing competitive firm, thinking at the margin is much more important than it is for a profit-maximizing monopolist.E) C) and D)
F) A) and C)

Question 3

Which of the following is an example of a barrier to entry?

Accepted Answer

A)   Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup.
B)   Mark charges a lower price to students than to faculty for his tattoo services.
C)   Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring.
D)   John obtained a copyright for the song he wrote and recorded.E) A) and C)
F) All of the above

Question 4

A monopolist faces the following demand curve: 
The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit.If the monopolist were able to perfectly price discriminate,how many units would it sell?

Accepted Answer

A)   400
B)   500
C)   900
D)   4,200E) All of the above
F) C) and D)

Question 5

One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where

Accepted Answer

A)   marginal cost equals price, while a monopolist produces where price exceeds marginal cost.
B)   marginal cost equals price, while a monopolist produces where marginal cost exceeds price.
C)   price exceeds marginal cost, while a monopolist produces where marginal cost equals price.
D)   marginal cost exceeds price, while a monopolist produces where marginal cost equals price.E) A) and B)
F) A) and C)

Question 6

For a monopoly,marginal revenue is often greater than the price it charges for its good.

Accepted Answer

A) True 
 B)False

Question 7

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost,the government will likely need to subsidize the firm.

Accepted Answer

A) True 
 B)False

Question 8

When a monopoly increases its output and sales,

Accepted Answer

A)   both the output effect and the price effect work to increase total revenue.
B)   the output effect works to increase total revenue, and the price effect works to decrease total revenue.
C)   the output effect works to decrease total revenue, and the price effect works to increase total revenue.
D)   both the output effect and the price effect work to decrease total revenue.E) None of the above
F) A) and C)

Question 9

Table 15-18
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.
 
-Refer to Table 15-18.If the monopolist can engage in perfect price discrimination,what is the marginal revenue from selling the 8th tie?

Accepted Answer

A)   $45
B)   $60
C)   $80
D)   $95E) B) and D)
F) B) and C)

Question 10

A market force that can prevent firms from price discriminating is

Accepted Answer

A)   fluctuating resource prices.
B)   arbitrage.
C)   high fixed costs.
D)   marginal-cost pricing.E) A) and B)
F) A) and C)

Question 11

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Accepted Answer

The defining characteristic of...

Question 12

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What would the total profit be if she charged $6 per unit for her product?

Accepted Answer

A)   $1
B)   $3
C)   $8
D)   $15E) A) and B)
F) A) and C)

Question 13

Which of the following is not one of the ways that antitrust laws promote competition?

Accepted Answer

A)   Antitrust laws allow the government to prevent mergers.
B)   Antitrust laws allow the government to break up companies into smaller ones.
C)   Antitrust laws prevent companies from coordinating their activities in ways that make markets less competitive.
D)   Antitrust laws allow the government to shut down any firm the government believes has monopoly power.E) B) and D)
F) None of the above

Question 14

A monopolist produces where P > MC = MR.

Accepted Answer

A) True 
 B)False

Question 15

Antitrust laws allow the government to

Accepted Answer

A)   prevent mergers.
B)   break up companies.
C)   promote competition.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 16

Which of the following statements is correct?

Accepted Answer

A)   Two examples of early antitrust laws are the Clinton and Stigler Antitrust Acts.
B)   Antitrust laws automatically prevent mergers between companies that produce similar products.
C)   Antitrust laws reduce the government's power to regulate private companies.
D)   Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.E) None of the above
F) All of the above

Question 17

Which of the following statements is correct?

Accepted Answer

A)   Firms with some degree of monopoly power are common, but firms with substantial monopoly power are rare.
B)   Firms with some degree of monopoly power are rare, as are firms with substantial monopoly power.
C)   Firms with some degree of monopoly power are common, as are firms with substantial monopoly power.
D)   Firms with some degree of monopoly power are rare, but firms with substantial monopoly power are common.E) B) and D)
F) A) and B)

Question 18

Which of the following statements is true?
(i) When a competitive firm sells an additional unit of output,its revenue increases by an amount less than the price.
(ii) When a monopoly firm sells an additional unit of output,its revenue increases by an amount less than the price.
(iii) Average revenue is the same as price for both competitive and monopoly firms.

Accepted Answer

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

Question 19

Table 15-11
The following table shows quantity, price, and marginal cost information for a monopoly:
 
-Refer to Table 15-11.What price should the firm charge to maximize its profit?

Accepted Answer

A)   $4
B)   $5
C)   $6
D)   $7E) A) and C)
F) All of the above

Question 20

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A)   quantity supplied.
B)   supply price.
C)   deadweight loss.
D)   producer surplus.E) B) and C)
F) A) and B)

Exam 15: Monopoly.

Which of the following statements is correct?

Correct Answer
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Correct Answer
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The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Correct Answer
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Which of the following statements is correct?

Correct Answer
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Antitrust laws allow the government to

Correct Answer
verified

Correct Answer
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A market force that can prevent firms from price discriminating is

Correct Answer
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One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where

Correct Answer
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Which of the following is an example of a barrier to entry?

Correct Answer
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For a monopoly,marginal revenue is often greater than the price it charges for its good.

Correct Answer
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If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost,the government will likely need to subsidize the firm.

Correct Answer
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Which of the following is not one of the ways that antitrust laws promote competition?

Correct Answer
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What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Correct Answer
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The defining characteristic of...
View Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What would the total profit be if she charged $6 per unit for her product?

Correct Answer
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Goods that do not have close substitutes have downward-sloping demand curves.

Correct Answer
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Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11.What price should the firm charge to maximize its profit?

Correct Answer
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A monopolist produces where P > MC = MR.

Correct Answer
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When a monopoly increases its output and sales,

Correct Answer
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The amount that producers receive for a good minus their costs of producing it equals

Correct Answer
verified

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit.If the monopolist were able to perfectly price discriminate,how many units would it sell?

Correct Answer
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Exam 15: Monopoly.

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The profit-maximization problem for a monopolist differs from that of a competitive firm in which of the following ways?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Antitrust laws allow the government to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A market force that can prevent firms from price discriminating is

Correct AnswerverifiedShow Answer

One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where

Correct AnswerverifiedShow Answer

Which of the following is an example of a barrier to entry?

Correct AnswerverifiedShow Answer

For a monopoly,marginal revenue is often greater than the price it charges for its good.

Correct AnswerverifiedShow Answer

If the government regulates the price a natural monopolist can charge to be equal to the firm's marginal cost,the government will likely need to subsidize the firm.

Correct AnswerverifiedShow Answer

Which of the following is not one of the ways that antitrust laws promote competition?

Correct AnswerverifiedShow Answer

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Correct AnswerverifiedThe defining characteristic of...View AnswerShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What would the total profit be if she charged $6 per unit for her product?

Correct AnswerverifiedShow Answer

Goods that do not have close substitutes have downward-sloping demand curves.

Correct AnswerverifiedShow Answer

Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11.What price should the firm charge to maximize its profit?

Correct AnswerverifiedShow Answer

A monopolist produces where P > MC = MR.

Correct AnswerverifiedShow Answer

When a monopoly increases its output and sales,

Correct AnswerverifiedShow Answer

The amount that producers receive for a good minus their costs of producing it equals

Correct AnswerverifiedShow Answer

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit.If the monopolist were able to perfectly price discriminate,how many units would it sell?

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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The defining characteristic of...
View Answer

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Correct Answer
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