Question 1

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

Question 2

Drug companies are allowed to be monopolists in the drugs they discover in order to

Accepted Answer

A)   allow drug companies to charge a price that is equal to their marginal cost.
B)   discourage new firms from entering the drug market.
C)   allow the government to earn patent revenue.
D)   None of the above is correct.E) C) and D)
F) B) and C)

Question 3

Figure 15-19 
-Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Accepted Answer

A)   $1.
B)   $1,562.5.
C)   $3,125.
D)   $6,250.E) None of the above
F) A) and B)

Question 4

Table 15-11
The following table shows quantity, price, and marginal cost information for a monopoly:
 
-Refer to Table 15-11. What level of output should the firm produce to maximize its profit?

Accepted Answer

A)   2 units
B)   3 units
C)   4 units
D)   5 unitsE) C) and D)
F) A) and D)

Question 5

Which of the following is not a characteristic of a monopoly?

Accepted Answer

A)   the seller has market power
B)   one seller
C)   free entry and exit
D)   a product without close substitutesE) C) and D)
F) A) and D)

Question 6

Which of the following is an example of a barrier to entry?

Accepted Answer

A)   Crystal charges a higher price than her competitors for her hair-styling services.
B)   Dan charges a lower price than his competitors for his dry-walling services.
C)   Jackie offers free samples of her loose-meat sandwiches to attract new customers.
D)   Roseanne obtains a copyright for a short story that she wrote and published.E) All of the above
F) B) and C)

Question 7

Like competitive firms, monopolies charge a price equal to marginal cost.

Accepted Answer

A) True 
 B)False

Question 8

Antitrust laws may

Accepted Answer

A)   enhance the ability of firms to capture profits from a concentration of market power.
B)   enhance the ability of firms to reduce economic losses.
C)   restrict the ability of firms to operate at the socially efficient level of production.
D)   restrict the ability of firms to merge.E) A) and D)
F) None of the above

Question 9

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

Accepted Answer

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

Question 10

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 11

Figure 15-22 
-Refer to Figure 15-22. If the monopolist uses perfect price discrimination, what price will it charge?

Accepted Answer

The amount...

Question 12

Figure 15-5 
-Refer to Figure 15-5. A profit-maximizing monopoly will produce an output level of

Accepted Answer

A)   Q1.
B)   Q2.
C)   Q3.
D)   Q4.E) B) and C)
F) C) and D)

Question 13

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 14

Figure 15-19 
-Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to

Accepted Answer

A)   $0.
B)   $1,562.50.
C)   $3,125.
D)   $6,250.E) None of the above
F) B) and D)

Question 15

Table 15-9
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 15-9. What is the marginal cost of the 4th unit?

Accepted Answer

A)   $4
B)   $14
C)   $31
D)   $62E) A) and B)
F) C) and D)

Question 16

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 17

Deadweight loss

Accepted Answer

A)   measures monopoly inefficiency.
B)   exceeds monopoly profits.
C)   equals monopoly profits.
D)   equals monopoly revenues minus profits.E) None of the above
F) B) and D)

Question 18

For a monopolist, when the output effect is greater than the price effect, marginal revenue is

Accepted Answer

A)   positive.
B)   negative.
C)   zero.
D)   maximized.E) All of the above
F) A) and B)

Question 19

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.
 
-Refer to Table 15-7. Sally will maximize her profits by selling

Accepted Answer

A)   3 pairs of shoes.
B)   4 pairs of shoes.
C)   6 pairs of shoes.
D)   7 pairs of shoes.E) A) and B)
F) A) and C)

Question 20

Figure 15-19 
-Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit without price discrimination equals

Accepted Answer

A)   $0.
B)   $1,562.50.
C)   $3,125.
D)   $6,250.E) All of the above
F) B) and D)

Exam 15: Monopoly

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will produce an output level of

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

Correct Answer
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Figure 15-22 -Refer to Figure 15-22. If the monopolist uses perfect price discrimination, what price will it charge?

Correct Answer
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The amount...
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Figure 15-23 -Refer to Figure 15-23. If a regulator requires the firm to charge a marginal cost price, what quantity will the firm produce?

Correct Answer
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Figure 15-19 -Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit without price discrimination equals

Correct Answer
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Which of the following is an example of a barrier to entry?

Correct Answer
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Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11. What level of output should the firm produce to maximize its profit?

Correct Answer
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Deadweight loss

Correct Answer
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Antitrust laws may

Correct Answer
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Correct Answer
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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

Figure 15-19 -Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to

Correct Answer
verified

Figure 15-19 -Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Correct Answer
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For a monopolist, when the output effect is greater than the price effect, marginal revenue is

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
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Which of the following is not a characteristic of a monopoly?

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. Sally will maximize her profits by selling

Correct Answer
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Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Correct Answer
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Like competitive firms, monopolies charge a price equal to marginal cost.

Correct Answer
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Drug companies are allowed to be monopolists in the drugs they discover in order to

Correct Answer
verified

Exam 15: Monopoly

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will produce an output level of

Correct AnswerverifiedShow Answer

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

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Figure 15-22 -Refer to Figure 15-22. If the monopolist uses perfect price discrimination, what price will it charge?

Correct AnswerverifiedThe amount...View AnswerShow Answer

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

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Figure 15-19 -Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit without price discrimination equals

Correct AnswerverifiedShow Answer

Which of the following is an example of a barrier to entry?

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 level of output should the firm produce to maximize its profit?

Correct AnswerverifiedShow Answer

Deadweight loss

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Antitrust laws may

Correct AnswerverifiedShow Answer

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

Figure 15-19 -Refer to Figure 15-19. If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to

Correct AnswerverifiedShow Answer

Figure 15-19 -Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit with perfect price discrimination equals

Correct AnswerverifiedShow Answer

For a monopolist, when the output effect is greater than the price effect, marginal revenue is

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

Which of the following is not a characteristic of a monopoly?

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. Sally will maximize her profits by selling

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Correct AnswerverifiedShow Answer

Like competitive firms, monopolies charge a price equal to marginal cost.

Correct AnswerverifiedShow Answer

Drug companies are allowed to be monopolists in the drugs they discover in order to

Correct AnswerverifiedShow Answer

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The amount...
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