Question 1

Which of the following is a characteristic of a natural monopoly?

Accepted Answer

A)   Average cost exceeds marginal cost over large regions of output.
B)   Increasing the number of firms increases each firm's average total cost.
C)   One firm can supply output at a lower cost than two firms.
D)   All of the above are correct.E) B) and C)
F) A) and C)

Question 2

Figure 15-23 
-Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Accepted Answer

The answer of Figure 15-23 
-Refer to Figure 15-23. If...

Question 3

Price discrimination is the business practice of

Accepted Answer

A)   bundling related products to increase total sales.
B)   selling the same good at different prices to different customers.
C)   pricing above marginal cost.
D)   hiring marketing experts to increase consumers' brand loyalty.E) B) and C)
F) A) and B)

Question 4

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Accepted Answer

A)   $22.
B)   $27.
C)   $54.
D)   $108.E) B) and C)
F) None of the above

Question 5

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
 
-Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Accepted Answer

A)   The firm saves $15.
B)   $15
C)   $30
D)   $40E) C) and D)
F) B) and D)

Question 6

Scenario 15-9
Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppose the executives also know that 200 students are willing to pay $8 for admission on a weekday. The cost of operating the museum on a weekday is $2,000.
-Refer to Scenario 15-9. How much profit will the museum earn if it charges all customers $8 for admission?

Accepted Answer

A)   $200
B)   $400
C)   $800
D)   $2,400E) A) and B)
F) A) and C)

Question 7

A monopolist's supply curve is horizontal.

Accepted Answer

A) True 
 B)False

Question 8

Figure 15-4 
-Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Accepted Answer

A)   P5.
B)   P4.
C)   P3.
D)   P1.E) A) and C)
F) B) and C)

Question 9

Sizable economic profits can persist over time under monopoly if the monopolist

Accepted Answer

A)   produces that output where average total cost is at a maximum.
B)   is protected by barriers to entry.
C)   operates as a price taker rather than a price maker.
D)   earns revenues that exceed variable costs.E) None of the above
F) A) and D)

Question 10

Figure 15-23 
-Refer to Figure 15-23. If the firm profit-maximizes, what price will it charge?

Accepted Answer

The answer of Figure 15-23 
-Refer to Figure 15-23. If...

Question 11

Figure 15-14 
-Refer to Figure 15-14. 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) A) and B)
F) C) and D)

Question 12

Authors are allowed to be monopolists in the sale of their books in order to

Accepted Answer

A)   encourage authors to write more and better books.
B)   correct for the negative externalities that the Internet and television impose.
C)   satisfy literary advocacy groups that exercise their lobbying power.
D)   promote a society in which people think for themselves and learn from whichever books they please.E) All of the above
F) None of the above

Question 13

A benefit of a monopoly is

Accepted Answer

A)   efficient production.
B)   decreasing long-run marginal costs.
C)   profit that can be invested in research and development.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 14

Which of the following is not an example of price discrimination?

Accepted Answer

A)   A movie theater charges a lower price for a child's ticket than for an adult's ticket.
B)   A university rebates part of the cost of tuition in the form of financial aid for needy students.
C)   A local pizza chain offers a "buy three get one free" deal.
D)   An ice cream parlor charges a higher price for ice cream than for sherbet.E) B) and D)
F) B) and C)

Question 15

Table 15-1
 
-Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Accepted Answer

A)   $3
B)   $5
C)   $11
D)   $17E) All of the above
F) B) and C)

Question 16

If the government deems a newly-invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Accepted Answer

A) True 
 B)False

Question 17

Table 15-21
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 15-21. 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) A) and B)
F) A) and C)

Question 18

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.
 
-Refer to Table 15-7. What is the marginal cost of the 8th pair of shoes?

Accepted Answer

A)   $50
B)   $60
C)   $90
D)   $110E) B) and C)
F) A) and B)

Question 19

Table 15-4
A monopolist faces the following demand curve:
 
-Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

Accepted Answer

A)   $12.50
B)   $5
C)   -$5
D)   -$12.50E) A) and B)
F) A) and C)

Question 20

Additional firms often do not try to compete with a natural monopoly because

Accepted Answer

A)   they fear retaliation in the form of pricing wars from the natural monopolist.
B)   they are unsure of the size of the market in general.
C)   they know they cannot achieve the same low costs that the natural monopolist enjoys.
D)   the natural monopoly does not make a large profit.E) A) and D)
F) B) and C)

Exam 15: Monopoly

Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Correct Answer
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Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the marginal cost of the 8th pair of shoes?

Correct Answer
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A benefit of a monopoly is

Correct Answer
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Which of the following is not an example of price discrimination?

Correct Answer
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Correct Answer
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Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Correct Answer
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A monopolist's supply curve is horizontal.

Correct Answer
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Sizable economic profits can persist over time under monopoly if the monopolist

Correct Answer
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Which of the following is a characteristic of a natural monopoly?

Correct Answer
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Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Correct Answer
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When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Correct Answer
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Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

Correct Answer
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Additional firms often do not try to compete with a natural monopoly because

Correct Answer
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Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, what price will it charge?

Correct Answer
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Figure 15-14 -Refer to Figure 15-14. A benevolent social planner would have the monopoly operate at an output level

Correct Answer
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Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Correct Answer
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Authors are allowed to be monopolists in the sale of their books in order to

Correct Answer
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If the government deems a newly-invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Correct Answer
verified

Price discrimination is the business practice of

Correct Answer
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Correct Answer
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Exam 15: Monopoly

Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Correct AnswerverifiedShow Answer

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the marginal cost of the 8th pair of shoes?

Correct AnswerverifiedShow Answer

A benefit of a monopoly is

Correct AnswerverifiedShow Answer

Which of the following is not an example of price discrimination?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Correct AnswerverifiedShow Answer

A monopolist's supply curve is horizontal.

Correct AnswerverifiedShow Answer

Sizable economic profits can persist over time under monopoly if the monopolist

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of a natural monopoly?

Correct AnswerverifiedShow Answer

Figure 15-4 -Refer to Figure 15-4. Profit will be maximized by charging a price equal to

Correct AnswerverifiedShow Answer

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Correct AnswerverifiedShow Answer

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

Correct AnswerverifiedShow Answer

Additional firms often do not try to compete with a natural monopoly because

Correct AnswerverifiedShow Answer

Figure 15-23 -Refer to Figure 15-23. If the firm profit-maximizes, what price will it charge?

Correct AnswerverifiedShow Answer

Figure 15-14 -Refer to Figure 15-14. A benevolent social planner would have the monopoly operate at an output level

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?

Correct AnswerverifiedShow Answer

Authors are allowed to be monopolists in the sale of their books in order to

Correct AnswerverifiedShow Answer

If the government deems a newly-invented drug to be truly original, the pharmaceutical company is given the exclusive right to manufacture and sell the drug for 50 years.

Correct AnswerverifiedShow Answer

Price discrimination is the business practice of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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