Question 1

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 5th tie?

Accepted Answer

A)   $80
B)   $100
C)   $110
D)   $120E) B) and C)
F) All of the above

Question 2

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 C)
F) C) and D)

Question 3

Figure 15-13 
-Refer to Figure 15-13.A benevolent social planner would have the monopoly operate at an output level

Accepted Answer

A)   less than Q0.
B)   greater than Q0.
C)   equal to Q0.
D)   equal to zero.E) None of the above
F) B) and D)

Question 4

In a natural monopoly,

Accepted Answer

A)   society would be better off if antitrust laws were used to create many different firms in the market.
B)   the marginal cost curve is positively sloped.
C)   if the government requires marginal cost pricing,it will likely have to subsidize the firm.
D)   the marginal revenue curve is horizontal.E) None of the above
F) A) and D)

Question 5

Which of the following statements is correct for both a monopolist and a perfectly competitive firm? i) 
The firm maximizes profits by equating marginal revenue with marginal cost.
Ii) 
The firm maximizes profits by equating price with marginal cost.
Iii) 
Demand equals marginal revenue.
Iv) 
Average revenue equals price.

Accepted Answer

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

Question 6

State two examples of government-created monopolies.

Accepted Answer

patents
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Question 7

When a monopolist reduces the quantity of output it produces and sells,

Accepted Answer

A)   the price of its output increases.
B)   the price of its output remains constant.
C)   the price of its output decreases.
D)   the profits for the firm always decrease.E) B) and D)
F) B) and C)

Question 8

Figure 15-1 
-Refer to Figure 15-1.Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Accepted Answer

A)   monopoly resources
B)   government regulation
C)   the production process
D)   Both a and b are correct.E) A) and C)
F) B) and D)

Question 9

Monopoly pricing prevents some mutually beneficial trades from taking place.These unrealized,mutually beneficial trades are

Accepted Answer

A)   of little concern to society.
B)   a deadweight loss to society.
C)   a sunk cost to society.
D)   also observed in competitive markets.E) A) and D)
F) None of the above

Question 10

Figure 15-14 
-Refer to Scenario 15-4.The profit-maximizing monopolist will have a deadweight loss of

Accepted Answer

A)   $6,400.
B)   $3,200.
C)   $1,600.
D)   $800.E) All of the above
F) None of the above

Question 11

Due to the nature of the patent laws on pharmaceuticals,the market for such drugs

Accepted Answer

A)   always remains a competitive market.
B)   always remains a monopolistic market.
C)   switches from competitive to monopolistic once the firm's patent runs out.
D)   switches from monopolistic to competitive once the firm's patent runs out.E) All of the above
F) A) and C)

Question 12

A profit-maximizing monopolist will produce the level of output at which

Accepted Answer

A)   average revenue is equal to average total cost.
B)   average revenue is equal to marginal cost.
C)   marginal revenue is equal to marginal cost.
D)   total revenue is equal to opportunity cost.E) C) and D)
F) B) and C)

Question 13

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" was the

Accepted Answer

A)   Morgan Act.
B)   Sherman Act.
C)   Clayton Act.
D)   14th Amendment.E) B) and C)
F) B) and D)

Question 14

The practice of selling the same goods to different customers at different prices,but with the same marginal cost,is known as

Accepted Answer

A)   price segregation.
B)   price discrimination.
C)   arbitrage.
D)   monopoly pricing.E) A) and B)
F) A) and D)

Question 15

Which of the following is not an example of a barrier to entry?

Accepted Answer

A)   Mighty Mitch's Mining Company owns a unique plot of land in Tanzania,under which lies the only large deposit of Tanzanite in the world.
B)   A college student starts a part-time tutoring business.
C)   A novelist obtains a copyright for her new book.
D)   A taxi cab driver in New York City obtains a license to legally provide transportation in New York City.E) A) and B)
F) A) and C)

Question 16

What are the three main sources of barriers to entry for monopolies?

Accepted Answer

monopoly resources
g...

Question 17

Table 15-17
 
-Refer to Table 15-17.If a monopolist faces a constant marginal cost of $2,how much output should the firm produce?

Accepted Answer

A)   3 units
B)   4 units
C)   5 units
D)   6 unitsE) None of the above
F) C) and D)

Question 18

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

Question 19

A natural monopoly has economies of scale for most if not all of its range of output.

Accepted Answer

A) True 
 B)False

Question 20

The economic inefficiency of a monopolist can be measured by the

Accepted Answer

A)   deadweight loss.
B)   value of the unrealized trades that could be made if the monopolist produced the socially-efficient output.
C)   area above marginal cost but beneath demand from the monopoly output to the socially-efficient output.
D)   All of the above are correct.E) All of the above
F) A) and B)

Exam 15: Monopoly

What are the three main sources of barriers to entry for monopolies?

Correct Answer
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monopoly resources
g...
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Figure 15-1 -Refer to Figure 15-1.Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

Correct Answer
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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 5th tie?

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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State two examples of government-created monopolies.

Correct Answer
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patents
co...
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In a natural monopoly,

Correct Answer
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When a monopolist reduces the quantity of output it produces and sells,

Correct Answer
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Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $2,how much output should the firm produce?

Correct Answer
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Figure 15-14 -Refer to Scenario 15-4.The profit-maximizing monopolist will have a deadweight loss of

Correct Answer
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Monopoly pricing prevents some mutually beneficial trades from taking place.These unrealized,mutually beneficial trades are

Correct Answer
verified

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" was the

Correct Answer
verified

The economic inefficiency of a monopolist can be measured by the

Correct Answer
verified

Due to the nature of the patent laws on pharmaceuticals,the market for such drugs

Correct Answer
verified

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
verified

A natural monopoly has economies of scale for most if not all of its range of output.

Correct Answer
verified

The practice of selling the same goods to different customers at different prices,but with the same marginal cost,is known as

Correct Answer
verified

A profit-maximizing monopolist will produce the level of output at which

Correct Answer
verified

Figure 15-13 -Refer to Figure 15-13.A benevolent social planner would have the monopoly operate at an output level

Correct Answer
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Which of the following is not an example of a barrier to entry?

Correct Answer
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Exam 15: Monopoly

What are the three main sources of barriers to entry for monopolies?

Correct Answerverifiedmonopoly resourcesg...View AnswerShow Answer

Figure 15-1 -Refer to Figure 15-1.Which of the following reasons describes the fundamental barrier to entry for the monopoly in the figure?

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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?

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Correct AnswerverifiedShow Answer

State two examples of government-created monopolies.

Correct Answerverifiedpatentsco...View AnswerShow Answer

In a natural monopoly,

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When a monopolist reduces the quantity of output it produces and sells,

Correct AnswerverifiedShow Answer

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $2,how much output should the firm produce?

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Figure 15-14 -Refer to Scenario 15-4.The profit-maximizing monopolist will have a deadweight loss of

Correct AnswerverifiedShow Answer

Monopoly pricing prevents some mutually beneficial trades from taking place.These unrealized,mutually beneficial trades are

Correct AnswerverifiedShow Answer

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" was the

Correct AnswerverifiedShow Answer

The economic inefficiency of a monopolist can be measured by the

Correct AnswerverifiedShow Answer

Due to the nature of the patent laws on pharmaceuticals,the market for such drugs

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 natural monopoly has economies of scale for most if not all of its range of output.

Correct AnswerverifiedShow Answer

The practice of selling the same goods to different customers at different prices,but with the same marginal cost,is known as

Correct AnswerverifiedShow Answer

A profit-maximizing monopolist will produce the level of output at which

Correct AnswerverifiedShow Answer

Figure 15-13 -Refer to Figure 15-13.A benevolent social planner would have the monopoly operate at an output level

Correct AnswerverifiedShow Answer

Which of the following is not an example of a barrier to entry?

Correct AnswerverifiedShow Answer

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monopoly resources
g...
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patents
co...
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