Question 1

Which of the following may eliminate some or all of the inefficiency that results from monopoly pricing?

Accepted Answer

A)   The government can regulate the monopoly.
B)   The monopoly can be prohibited from price discriminating.
C)   The monopoly can be forced to operate at a point where its marginal revenue is equal to its marginal cost.
D)   None of the above would eliminate any inefficiency associated with a monopoly.E) C) and D)
F) B) and D)

Question 2

Which of the following statements is correct?

Accepted Answer

A)   The benefits that accrue to a monopoly's owners are equal to the costs that are incurred by consumers of that firm's product.
B)   The deadweight loss that arises in monopoly stems from the fact that the profit-maximizing monopoly firm produces a quantity of output that exceeds the socially-efficient quantity.
C)   The deadweight loss caused by monopoly is similar to the deadweight loss caused by a tax on a product.
D)   The primary social problem caused by monopoly is monopoly profit.E) B) and D)
F) B) and C)

Question 3

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 4

Figure 15-2

-Refer to Figure 15-2.Which of the following statements is correct?

Accepted Answer

A)   Panel C represents the typical demand curve for a perfectly competitive industry.
B)   Panel B represents the typical demand curve for a monopoly.
C)   Panel B represents the typical demand curve for a perfectly competitive firm.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 5

Which of the following statements is correct?

Accepted Answer

A)   The demand curve facing a competitive firm is horizontal, as is the demand curve facing a monopolist.
B)   The demand curve facing a competitive firm is downward sloping, whereas the demand curve facing a monopolist is horizontal.
C)   The demand curve facing a competitive firm is horizontal, whereas the demand curve facing a monopolist is downward sloping.
D)   The demand curve facing a competitive firm is downward sloping, as is the demand curve facing a monopolist.E) All of the above
F) None of the above

Question 6

By selling hardcover books to die-hard fans and paperback books to less enthusiastic readers,the publisher is able to price discriminate and raise its profits.

Accepted Answer

A) True 
 B)False

Question 7

A monopoly firm is a price

Accepted Answer

A)   taker and has no supply curve.
B)   maker and has no supply curve
C)   taker and has an upward-sloping supply curve.
D)   maker and has an upward-sloping supply curve.E) B) and C)
F) A) and C)

Question 8

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Accepted Answer

A) True 
 B)False

Question 9

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) A) and B)
F) A) and C)

Question 10

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) None of the above
F) All of the above

Question 11

Suppose a profit-maximizing monopolist faces a constant marginal cost of $10,produces an output level of 100 units,and charges a price of $50.The socially efficient level of output is 200 units.Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines.The monopoly deadweight loss equals $4,000.

Accepted Answer

A) True 
 B)False

Question 12

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Accepted Answer

A)   is unaffected.
B)   decreases.
C)   increases.
D)   There is not enough information given in answer the question.E) B) and D)
F) B) and C)

Question 13

Figure 15-8
 
-Refer to Figure 15-8.To maximize total surplus,a benevolent social planner would choose which of the following outcomes?

Accepted Answer

A)   100 units of output and a price of $10 per unit
B)   150 units of output and a price of $10 per unit
C)   150 units of output and a price of $15 per unit
D)   200 units of output and a price of $10 per unitE) B) and C)
F) A) and C)

Question 14

Table 15-1
 
-Refer to Table 15-1.Assume this monopolist's marginal cost is constant at $12.What quantity of output (Q) will it produce and what price (P) will it charge?

Accepted Answer

A)   Q = 4, P = $29
B)   Q = 4, P = $26
C)   Q = 5, P = $23
D)   Q = 7, P = $17E) A) and B)
F) All of the above

Question 15

The profit that a monopolist earns represents a loss to society that is measured through deadweight loss.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not correct?

Accepted Answer

A)   Antitrust laws may prevent mergers that would actually raise social welfare.
B)   Public ownership is the most common public policy toward monopolies in the United States.
C)   Regulation is a common strategy for a natural monopoly.
D)   Sometimes the best public policy toward a monopoly may be to do nothing.E) None of the above
F) A) and B)

Question 17

Table 15-2
Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $3 per unit.
 
-Refer to Table 15-2.What is Tanya's profit-maximizing price?

Accepted Answer

A)   $2
B)   $4
C)   $6
D)   $8E) A) and B)
F) A) and C)

Question 18

A monopolist's supply curve is vertical.

Accepted Answer

A) True 
 B)False

Question 19

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 C)
F) B) and D)

Question 20

Suppose a profit-maximizing monopolist faces a constant marginal cost of $10,produces an output level of 100 units,and charges a price of $50.The socially efficient level of output is 200 units.Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines.The monopoly deadweight loss equals $2,000.

Accepted Answer

A) True 
 B)False

Exam 15: Monopoly.

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Which of the following may eliminate some or all of the inefficiency that results from monopoly pricing?

Correct Answer
verified

The profit that a monopolist earns represents a loss to society that is measured through deadweight loss.

Correct Answer
verified

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

Correct Answer
verified

By selling hardcover books to die-hard fans and paperback books to less enthusiastic readers,the publisher is able to price discriminate and raise its profits.

Correct Answer
verified

Table 15-1 -Refer to Table 15-1.Assume this monopolist's marginal cost is constant at $12.What quantity of output (Q) will it produce and what price (P) will it charge?

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Figure 15-8 -Refer to Figure 15-8.To maximize total surplus,a benevolent social planner would choose which of the following outcomes?

Correct Answer
verified

A monopolist's supply curve is vertical.

Correct Answer
verified

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

Correct Answer
verified

A monopoly firm is a price

Correct Answer
verified

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Correct Answer
verified

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

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
verified

Correct Answer
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Correct Answer
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Which of the following is not correct?

Correct Answer
verified

Table 15-2 Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $3 per unit. -Refer to Table 15-2.What is Tanya's profit-maximizing price?

Correct Answer
verified

Exam 15: Monopoly.

As a monopolist increases the quantity of output it sells,the price consumers are willing to pay for the good

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following may eliminate some or all of the inefficiency that results from monopoly pricing?

Correct AnswerverifiedShow Answer

The profit that a monopolist earns represents a loss to society that is measured through deadweight loss.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

By selling hardcover books to die-hard fans and paperback books to less enthusiastic readers,the publisher is able to price discriminate and raise its profits.

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1.Assume this monopolist's marginal cost is constant at $12.What quantity of output (Q) will it produce and what price (P) will it charge?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Figure 15-8 -Refer to Figure 15-8.To maximize total surplus,a benevolent social planner would choose which of the following outcomes?

Correct AnswerverifiedShow Answer

A monopolist's supply curve is vertical.

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

A monopoly firm is a price

Correct AnswerverifiedShow Answer

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Table 15-2 Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $3 per unit. -Refer to Table 15-2.What is Tanya's profit-maximizing price?

Correct AnswerverifiedShow Answer

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