Question 1

When the marginal revenue curve is drawn for a monopolist, the curve

Accepted Answer

A)  ​is above the monopolist's demand curve initially and then falls below the demand curve.
B)  ​is above the monopolist's demand curve for all output levels.
C)  is equal to the monopolist's demand curve at all output levels.
D)  ​is below the monopolist's demand curve, beyond the initial unit produced.E) None of the above
F) All of the above

Question 2

A monopoly market

Accepted Answer

A)  always maximizes total economic well-being.
B)  always minimizes consumer surplus.
C)  generally fails to maximize total economic well-being.
D)  generally fails to maximize producer surplus.E) A) and B)
F) A) and C)

Question 3

Figure 15-1 
-Refer to Figure 15-1. If the monopolist uses perfect price discrimination, how much deadweight loss results?

Accepted Answer

The answer of Figure 15-1 
-Refer to Figure 15-1. If...

Question 4

Figure 15-5 
-Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Accepted Answer

A)  P1.
B)  P2.
C)  P3.
D)  P4.E) A) and B)
F) A) and C)

Question 5

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Accepted Answer

A) True 
 B)False

Question 6

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $9 it sells 62 units. The marginal revenue for the firm over this range is

Accepted Answer

A)  $18.
B)  $23.
C)  $46.
D)  $92.E) C) and D)
F) B) and D)

Question 7

One example of price discrimination occurs in the publishing industry when a publisher initially releases an expensive hardcover edition of a popular novel and later releases a cheaper paperback edition. Use this example to demonstrate the benefits and potential pitfalls of a price discrimination pricing strategy.

Accepted Answer

The answer should address the three basi...

Question 8

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. 
-​Refer to Figure 15-22. Based upon the information shown, what is total revenue for Bearclaws, given that it maximizes profits?

Accepted Answer

A)  ​$900.
B)  ​$980.
C)  ​$490.
D)  ​$1080.E) C) and D)
F) B) and C)

Question 9

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

Accepted Answer

A)  not a concern if a market is perfectly competitive.
B)  a deadweight loss to society.
C)  a function of the reduction in the quantity produced by a monopolist in comparison to a competitive market.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 10

For a monopoly firm, the shape and position of the demand curve play a role in determining the
(i) profit-maximizing price.
(ii) shape and position of the marginal-cost curve.
(iii) shape and position of the marginal-revenue curve.

Accepted Answer

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

Question 11

Suppose ABC Aluminum Inc. owns 80% of the world's bauxite, a mineral used in the production of aluminum. Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Accepted Answer

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

Question 12

Figure 15-18 
-Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

Accepted Answer

A)  $0.
B)  $1,000.
C)  $2,000.
D)  $4,000.E) A) and B)
F) A) and C)

Question 13

Customers who purchase an audio CD from Sally's Sounds are charged 20% more than customers who purchase the audio CD from the Sally's Sounds website. This is an example of

Accepted Answer

A)  perfect price discrimination.
B)  price discrimination.
C)  deadweight loss.
D)  socially inefficient output.E) A) and C)
F) All of the above

Question 14

The fundamental source of monopoly power is

Accepted Answer

A)  many buyers and sellers.
B)  low fixed costs.
C)  rising average total costs.
D)  barriers to entry.E) A) and C)
F) All of the above

Question 15

Scenario 15-5
An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc.
-Refer to Scenario 15-5. How much profit will the airline earn if it sets the price of each ticket at $600?

Accepted Answer

A)  -$5,000
B)  $15,000
C)  $40,000
D)  $60,000E) None of the above
F) All of the above

Question 16

Which of the following is an example of price discrimination?

Accepted Answer

A)  An online bookstore charges more for overnight shipping than standard shipping when customers buy books from it.
B)  Airline tickets are more expensive for first-class seats than for coach.
C)  Hotel rates for AAA members are lower than for nonmembers.
D)  All of the above are correct.E) A) and B)
F) A) and C)

Question 17

Comparing firms in perfectly competitive markets to monopoly firms, which produces more output?

Accepted Answer

perfectly ...

Question 18

A natural monopoly occurs when

Accepted Answer

A)  the product is sold in its natural state, such as water or diamonds.
B)  there are economies of scale over the relevant range of output.
C)  the firm is characterized by a rising marginal cost curve.
D)  production requires the use of free natural resources, such as water or air.E) A) and D)
F) All of the above

Question 19

Scenario 15-8
Mega Media Cable TV is able to purchase an exclusive right to sell a premium sports channel in its market area. Let's assume that Mega Media pays $100,000 a year for the exclusive marketing rights to the sports channel. Since Mega Media has already installed cable to all of the homes in its market area, the marginal cost of delivering the sports channel to subscribers is zero. The manager of Mega Media needs to know what price to charge for the sports channel service to maximize her profit. Before setting price, she hires an economist to estimate demand for the sports channel. The economist discovers that there are two types of subscribers who value premium sporting channels. First are the 3,000 die-hard sports fans who will pay as much as $150 a year for the new channel. Second, the premium sports channel will appeal to 20,000 occasional sports viewers who will pay as much as $25 a year for a subscription to it.
-Refer to Scenario 15-8. If Mega Media Cable TV is unable to price discriminate, what price will it choose to maximize its profit, and what is the amount of the profit?

Accepted Answer

A)  price = $25; profit = $575,000
B)  price = $25; profit = $475,000
C)  price = $150; profit = $450,000
D)  price = $150; profit = $350,000E) A) and B)
F) All of the above

Question 20

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Accepted Answer

perfectly ...

Exam 15: Monopoly

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Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Correct Answer
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perfectly ...
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Figure 15-1 -Refer to Figure 15-1. If the monopolist uses perfect price discrimination, how much deadweight loss results?

Correct Answer
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Which of the following is an example of price discrimination?

Correct Answer
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A monopoly market

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Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what is total revenue for Bearclaws, given that it maximizes profits?

Correct Answer
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Customers who purchase an audio CD from Sally's Sounds are charged 20% more than customers who purchase the audio CD from the Sally's Sounds website. This is an example of

Correct Answer
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Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Correct Answer
verified

When the marginal revenue curve is drawn for a monopolist, the curve

Correct Answer
verified

Correct Answer
verified
The answer should address the three basi...
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When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $9 it sells 62 units. The marginal revenue for the firm over this range is

Correct Answer
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For a monopoly firm, the shape and position of the demand curve play a role in determining the (i) profit-maximizing price. (ii) shape and position of the marginal-cost curve. (iii) shape and position of the marginal-revenue curve.

Correct Answer
verified

The fundamental source of monopoly power is

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

Correct Answer
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Suppose ABC Aluminum Inc. owns 80% of the world's bauxite, a mineral used in the production of aluminum. Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Correct Answer
verified

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Correct Answer
verified

Figure 15-18 -Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

Correct Answer
verified

A natural monopoly occurs when

Correct Answer
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Comparing firms in perfectly competitive markets to monopoly firms, which produces more output?

Correct Answer
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perfectly ...
View Answer

Exam 15: Monopoly

Correct AnswerverifiedShow Answer

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Correct Answerverifiedperfectly ...View AnswerShow Answer

Figure 15-1 -Refer to Figure 15-1. If the monopolist uses perfect price discrimination, how much deadweight loss results?

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Which of the following is an example of price discrimination?

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A monopoly market

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​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -​Refer to Figure 15-22. Based upon the information shown, what is total revenue for Bearclaws, given that it maximizes profits?

Correct AnswerverifiedShow Answer

Customers who purchase an audio CD from Sally's Sounds are charged 20% more than customers who purchase the audio CD from the Sally's Sounds website. This is an example of

Correct AnswerverifiedShow Answer

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Correct AnswerverifiedShow Answer

When the marginal revenue curve is drawn for a monopolist, the curve

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe answer should address the three basi...View AnswerShow Answer

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $9 it sells 62 units. The marginal revenue for the firm over this range is

Correct AnswerverifiedShow Answer

For a monopoly firm, the shape and position of the demand curve play a role in determining the (i) profit-maximizing price. (ii) shape and position of the marginal-cost curve. (iii) shape and position of the marginal-revenue curve.

Correct AnswerverifiedShow Answer

The fundamental source of monopoly power is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Suppose ABC Aluminum Inc. owns 80% of the world's bauxite, a mineral used in the production of aluminum. Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Correct AnswerverifiedShow Answer

A monopolist maximizes profit by producing an output level where marginal cost equals price.

Correct AnswerverifiedShow Answer

Figure 15-18 -Refer to Figure 15-18. If the monopoly firm perfectly price discriminates, then consumer surplus amounts to

Correct AnswerverifiedShow Answer

A natural monopoly occurs when

Correct AnswerverifiedShow Answer

Comparing firms in perfectly competitive markets to monopoly firms, which produces more output?

Correct Answerverifiedperfectly ...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
perfectly ...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what is total revenue for Bearclaws, given that it maximizes profits?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The answer should address the three basi...
View Answer

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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