Question 1

Generic drugs enter the pharmaceutical drug market once

Accepted Answer

A)   the ingredients to the name brand drug have been discovered.
B)   10 years have passed.
C)   they are patented.
D)   the patent on the name brand drug expires.E) A) and B)
F) None of the above

Question 2

Price discrimination requires the firm to

Accepted Answer

A)   separate customers according to their willingnesses to pay.
B)   differentiate between different units of its product.
C)   engage in arbitrage.
D)   use coupons.E) C) and D)
F) A) and C)

Question 3

A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

Accepted Answer

A)   marginal cost and demand curves.
B)   average total cost and demand curves.
C)   marginal revenue and average total cost curves.
D)   marginal revenue and marginal cost curves.E) A) and C)
F) A) and D)

Question 4

The market demand curve for a monopolist is typically

Accepted Answer

A)   unit price elastic.
B)   downward sloping.
C)   horizontal.
D)   vertical.E) C) and D)
F) A) and B)

Question 5

The DeBeers company faces very little competition from other firms in the wholesale diamond market.Why isn't the price of the wholesale diamonds $10,000 per carat?

Accepted Answer

A)   because the government would not allow such a high price
B)   because stockholders would not allow such a high price
C)   because the company would sell so few copies that they would earn higher profits by selling at a lower price
D)   All of the above are correct.E) All of the above
F) A) and D)

Question 6

Perfect price discrimination describes a situation in which the monopolist

Accepted Answer

A)   knows the exact willingness to pay of each of its customers.
B)   charges exactly two different prices to exactly two different groups of customers.
C)   maximizes consumer surplus.
D)   experiences a zero economic profit.E) A) and B)
F) B) and D)

Question 7

Price discrimination explains why Ivy League universities often base tuition costs on students'

Accepted Answer

A)   age.
B)   financial resources.
C)   high school GPA.
D)   gender.E) None of the above
F) B) and C)

Question 8

Give some examples of the benefits and costs of antitrust laws.

Accepted Answer

Benefits include promoting com...

Question 9

Table 15-4
A monopolist faces the following demand curve:
 
-Refer to Table 15-4.The monopolist will not produce

Accepted Answer

A)   5 units or fewer under any circumstances.
B)   7.5 units or fewer under any circumstances.
C)   7.5 units or more under any circumstances.
D)   10 units or more under any circumstances.E) A) and D)
F) None of the above

Question 10

A firm cannot price discriminate if

Accepted Answer

A)   its has declining marginal revenue.
B)   it operates in a competitive market.
C)   buyers only reveal the price they are willing to pay for the product.
D)   it has a constant marginal cost.E) A) and D)
F) C) and D)

Question 11

The socially efficient level of production occurs where the marginal cost curve intersects

Accepted Answer

A)   average variable cost.
B)   average total cost.
C)   demand.
D)   marginal revenue.E) B) and C)
F) A) and C)

Question 12

Which of the following statements is not correct?

Accepted Answer

A)   Part of the deadweight loss associated with monopoly is measured by the monopolist's economic profit.
B)   Marginal cost is always less than average total cost in a natural monopoly.
C)   Discount coupons available free to the public are a type of price discrimination.
D)   Anti-trust laws make it harder for firms to create synergies.E) All of the above
F) None of the above

Question 13

Which of the following statements is not correct?

Accepted Answer

A)   The government may use antitrust laws to prevent a merger if the government believes the merger will reduce competition and increase prices.
B)   By regulating a natural monopoly where price equals average total cost,the monopoly earns zero profits.
C)   An advantage of private ownership over public ownership is that private business owners tend to fire inefficient managers.
D)   The government should always intervene to improve monopoly inefficiency.E) None of the above
F) A) and B)

Question 14

Table 15-14
The following table gives information on the price,quantity,and total cost of production for a monopolist.
 
-Refer to Table 15-14.At what price does marginal revenue equal marginal cost?

Accepted Answer

A)   $5
B)   $4
C)   $3
D)   $2E) A) and D)
F) C) and D)

Question 15

Economists assume that monopolists behave as

Accepted Answer

A)   cost minimizers.
B)   profit maximizers.
C)   price maximizers.
D)   maximizers of social welfare.E) A) and C)
F) A) and B)

Question 16

Figure 15-15 
-Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Accepted Answer

A)   $0.
B)   $100.
C)   $200.
D)   $500.E) All of the above
F) B) and D)

Question 17

A benefit to society of the patent and copyright laws is that those laws

Accepted Answer

A)   help to keep prices down.
B)   help to prevent a single firm from acquiring ownership of a key resource.
C)   encourage creative activity.
D)   discourage the production of inefficient products.E) A) and D)
F) B) and C)

Question 18

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6.What is the marginal revenue from the sale of the 4th unit?

Accepted Answer

A)   $-3
B)   $3
C)   $9
D)   $24E) All of the above
F) A) and B)

Question 19

Firms with substantial monopoly power are quite common because many goods are unique.

Accepted Answer

A) True 
 B)False

Question 20

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost,the firm has no incentive to reduce costs.

Accepted Answer

A) True 
 B)False

Exam 15: Monopoly

Figure 15-15 -Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

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The socially efficient level of production occurs where the marginal cost curve intersects

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If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost,the firm has no incentive to reduce costs.

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A monopoly chooses to supply the market with a quantity of a product that is determined by the intersection of the

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Which of the following statements is not correct?

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A firm cannot price discriminate if

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Generic drugs enter the pharmaceutical drug market once

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Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.The monopolist will not produce

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A benefit to society of the patent and copyright laws is that those laws

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Price discrimination requires the firm to

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Table 15-14 The following table gives information on the price,quantity,and total cost of production for a monopolist. -Refer to Table 15-14.At what price does marginal revenue equal marginal cost?

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Firms with substantial monopoly power are quite common because many goods are unique.

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Perfect price discrimination describes a situation in which the monopolist

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Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.What is the marginal revenue from the sale of the 4th unit?

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Which of the following statements is not correct?

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Price discrimination explains why Ivy League universities often base tuition costs on students'

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The market demand curve for a monopolist is typically

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The DeBeers company faces very little competition from other firms in the wholesale diamond market.Why isn't the price of the wholesale diamonds $10,000 per carat?

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Give some examples of the benefits and costs of antitrust laws.

Correct AnswerverifiedBenefits include promoting com...View AnswerShow Answer

Economists assume that monopolists behave as

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Benefits include promoting com...
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