Filters
Question type
Study Flashcards

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


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 C)
F) All of the above

Correct Answer

verifed

verified

Price discrimination can increase both the monopolist's profits and society's welfare.

A) True
B) False

Correct Answer

verifed

verified

Average revenue for a monopoly is the total revenue divided by the quantity produced.

A) True
B) False

Correct Answer

verifed

verified

A monopoly's marginal cost will


A) be less than its average fixed cost.
B) be less than the price per unit of its product.
C) exceed its marginal revenue.
D) equal its average total cost.

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

Which of the following is not one of the ways that antitrust laws promote competition?


A) Antitrust laws allow the government to prevent mergers.
B) Antitrust laws allow the government to break up companies into smaller ones.
C) Antitrust laws prevent companies from coordinating their activities in ways that make markets less competitive.
D) Antitrust laws allow the government to shut down any firm the government believes has monopoly power.

E) C) and D)
F) A) and B)

Correct Answer

verifed

verified

Figure 15-22 Figure 15-22 -Refer to Figure 15-22. How much consumer surplus results if this single-price monopolist profit-maximizes? -Refer to Figure 15-22. How much consumer surplus results if this single-price monopolist profit-maximizes?

Correct Answer

verifed

verified

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

Correct Answer

verifed

verified

Figure 15-9 Figure 15-9 -Refer to Figure 15-9. The monopolist's maximum profit A) is $1,600. B) is $2,000. C) is $2,500. D) cannot be determined from the diagram. -Refer to Figure 15-9. The monopolist's maximum profit


A) is $1,600.
B) is $2,000.
C) is $2,500.
D) cannot be determined from the diagram.

E) A) and D)
F) A) and B)

Correct Answer

verifed

verified

Table 15-2 Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $3 per unit. Table 15-2 Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost of $3 per unit. -Refer to Table 15-2. What is Tanya's profit-maximizing price? A) $2 B) $4 C) $6 D) $8 -Refer to Table 15-2. What is Tanya's profit-maximizing price?


A) $2
B) $4
C) $6
D) $8

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

A perfectly price-discriminating monopolist is able to


A) maximize profit and produce a socially-optimal level of output.
B) maximize profit, but not produce a socially-optimal level of output.
C) produce a socially-optimal level of output, but not maximize profit.
D) exercise illegal preferences regarding the race and/or gender of its employees.

E) C) and D)
F) None of the above

Correct Answer

verifed

verified

If a monopolist can practice perfect price discrimination, the monopolist will


A) eliminate consumer surplus.
B) eliminate deadweight loss.
C) maximize profits.
D) All of the above are correct.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Scenario 15-2 Consider a local, privately-owned electrical cooperative named Poweshiek Power Company (PPCo) . PPCo has just completed a clean-coal-burning electrical power plant in Iowa. Currently, PPCo can meet the electricity needs of all residents in the county. In fact, its capacity far exceeds the needs of the county. After just a few years of operation, the shareholders of PPCo experienced incredibly high rates of return on their investment due to the profitability of the corporation. -Refer to Scenario 15-2. Which of the following statements is most likely to be true? (i) New entrants to the market know they will have a smaller market share than PPCo currently has. (ii) PPCo is most likely experiencing rising marginal cost. (iii) PPCo is a natural monopoly. (iv) PPCo is most likely experiencing declining average total cost.


A) (i) and (ii) only
B) (i) , (ii) , and (iii) only
C) (i) , (iii) and (iv) only
D) (i) , (ii) , (iii) , and (iv)

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Table 15-4 A monopolist faces the following demand curve: Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 5 units, what is its average revenue? A) $100 B) $20 C) $5 D) $4 -Refer to Table 15-4. If the monopolist produces 5 units, what is its average revenue?


A) $100
B) $20
C) $5
D) $4

E) All of the above
F) C) and D)

Correct Answer

verifed

verified

If a social planner were running a monopoly, that planner could achieve an efficient outcome by charging the price that is determined by the


A) minimum point on the average total cost curve.
B) intersection of the average total cost curve and the demand curve.
C) intersection of the marginal cost curve and the demand curve.
D) intersection of the marginal cost curve and the marginal revenue curve.

E) None of the above
F) B) and D)

Correct Answer

verifed

verified

When a monopolist increases the quantity that it sells, all else equal, total revenue increases, which is called the output effect.

A) True
B) False

Correct Answer

verifed

verified

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back. What is the reason for this price discrepancy?


A) Airlines are practicing imperfect price discrimination to raise their profits.
B) Airlines charge a different rate based on the different nature of peoples' travel needs.
C) Airlines are attempting to charge people based on their willingness to pay.
D) All of the above are correct.

E) C) and D)
F) B) and D)

Correct Answer

verifed

verified

A monopolist that practices perfect price discrimination


A) creates no deadweight loss.
B) charges one group of buyers a higher price than another group, such as offering a student discount.
C) charges a higher price but produces the same monopoly level of output as when a single price is charged.
D) charges some customers a price below marginal cost because costs are covered by the high-priced buyers.

E) B) and D)
F) None of the above

Correct Answer

verifed

verified

Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing? The government could


A) regulate the monopoly.
B) prohibited the monopoly from price discriminating.
C) force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost.
D) None of the above would eliminate any inefficiency associated with a monopoly.

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

Scenario 15-6 The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die- hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc. -Refer to Scenario 15-6. How much profit will the concert promoters earn if they set the price of each ticket at $50?


A) $25,000
B) $75,000
C) $100,000
D) $150,000

E) All of the above
F) A) and B)

Correct Answer

verifed

verified

Table 15-9 Consider the following demand and cost information for a monopoly. Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What price should the monopoly charge to maximize profit? A) $16 B) $20 C) $24 D) $28 -Refer to Table 15-9. What price should the monopoly charge to maximize profit?


A) $16
B) $20
C) $24
D) $28

E) A) and B)
F) None of the above

Correct Answer

verifed

verified

Showing 101 - 120 of 637

Related Exams

Exam 1

Ten Principles of Economics

439 Questions

Exam 2

Thinking Like an Economist

617 Questions

Exam 3

Interdependence and the Gains From Trade

527 Questions

Exam 4

The Market Forces of Supply and Demand

698 Questions

Exam 5

Elasticity and Its Application

595 Questions

Exam 6

Supply, Demand, and Government Policies

644 Questions

Exam 7

Consumers, Producers, and the Efficiency of Markets

549 Questions

Exam 8

Application: The Costs of Taxation

511 Questions

Exam 9

Application: International Trade

493 Questions

Exam 10

Externalities

524 Questions

Exam 11

Public Goods and Common Resources

433 Questions

Exam 12

The Design of the Tax System

551 Questions

Exam 13

The Costs of Production

420 Questions

Exam 14

Firms in Competitive Markets

543 Questions

Exam 16

Monopolistic Competition

587 Questions

Exam 17

Oligopoly

496 Questions

Exam 18

The Markets for the Factors of Production

564 Questions

Exam 19

Earnings and Discrimination

490 Questions

Exam 20

Income Inequality and Poverty

457 Questions

Exam 21

The Theory of Consumer Choice

440 Questions

Exam 22

Frontiers of Microeconomics

441 Questions

Show Answer