Question 1

Suppose a monopolist practices perfect price discrimination. Its marginal revenue curve

Accepted Answer

A)  will lie below its demand curve.
B)  will lie above its demand curve.
C)  will coincide with its demand curve.
D)  has no definite relationship with its demand curve.E) None of the above
F) B) and D)

Question 2

Public franchises, patents, and government licenses are examples of __________ barriers to entry.

Accepted Answer

A)  social
B)  legal
C)  cultural
D)  geographicE) None of the above
F) All of the above

Question 3

Exhibit 23-8  Refer to Exhibit 23-8. Average total cost at the profit-maximizing level of output equals

Accepted Answer

A)  $55.00.
B)  $63.33.
C)  $59.00.
D)  $54 .00.
E)  There is not enough information given to answer this question.F) D) and E)
G) A) and E)

Question 4

Exhibit 23-8  Refer to Exhibit 23-8. The maximum profits earned by this single-price monopolist will be

Accepted Answer

A)  $180.
B)  $130.
C)  $140.
D)  $170.E) A) and D)
F) A) and C)

Question 5

Exhibit 23-6 C units of X, its marginal revenue curve is A) A. B) B. C) C. D) D." class="answers-bank-image d-inline" rel="preload" >
Refer to Exhibit 23-6. If C is the demand curve facing a perfectly price-discriminating monopolist selling qC units of X, its marginal revenue curve is

Accepted Answer

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

Question 6

In maximizing profits, a single-price monopolist will charge a price that is

Accepted Answer

A)  less than marginal cost.
B)  equal to marginal cost.
C)  greater than marginal cost.
D)  There is not enough information to answer the question.E) B) and D)
F) B) and C)

Question 7

Exhibit 23-7 
Refer to Exhibit 23-7. Let D be the demand curve facing a perfectly price-discriminating monopolist. The marginal revenue it receives from selling the 150th unit of good X sold equals

Accepted Answer

A)  $60.
B)  $45.
C)  $30.
D)  $0, since it sells less than 150 units.E) All of the above
F) B) and C)

Question 8

Exhibit 23-4  Refer to Exhibit 23-4. The profit-maximizing single-price monopolist's maximum profit is

Accepted Answer

A)  $22.
B)  $42.
C)  $82.
D)  $130.
E)  $140.F) None of the above
G) C) and E)

Question 9

A right granted to a firm by government that permits the firm to provide a particular good or service and excludes others from doing the same is called

Accepted Answer

A)  a natural monopoly.
B)  a comparative advantage.
C)  an economy of scale.
D)  a public franchise.E) A) and B)
F) A) and C)

Question 10

At one time, monopolies were granted to people who were in the favor of kings and queens.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is an assumption of the theory of monopoly?

Accepted Answer

A)  There are extremely high barriers to entry.
B)  There are many sellers.
C)  The product has a number of close substitutes.
D)  The product is of extremely high quality.E) A) and B)
F) None of the above

Question 12

Economic rent is a payment received in excess of marginal cost.

Accepted Answer

A) True 
 B)False

Question 13

The ________________________ Acts, passed by the British Parliament in the 1760s, imposed taxes on a variety of products imported into the American colonies.

Accepted Answer

A)  Smoot-Hawley Tariff
B)  Tea
C)  Townsend
D)  British East IndiaE) A) and B)
F) A) and C)

Question 14

The term "arbitrage" refers to

Accepted Answer

A)  buying a good in a market where its price is high and selling the good in another market where its price is lower.
B)  buying a good in a market where its price is low and selling the good in another market where its price is higher.
C)  selling a good in a market where its price is high.
D)  selling a good in a market where its price is low.E) B) and D)
F) A) and C)

Question 15

A single-price monopolist

Accepted Answer

A)  must lower price on all previous units to sell an additional unit of output.
B)  is a price searcher.
C)  finds that its marginal revenue and price are the same for the first unit of the good it sells.
D)  necessarily faces a perfectly inelastic demand curve.E) C) and D)
F) A) and D)

Question 16

Both a price taker and a price searcher maximize profits (or minimize losses) by producing the quantity of output at which __________ equals __________.

Accepted Answer

A)  total revenue; total cost
B)  average total cost; price
C)  average variable cost; marginal cost
D)  marginal revenue; marginal cost
E)  marginal cost; average fixed costF) B) and E)
G) A) and B)

Question 17

Exhibit 23-9  Refer to Exhibit 23-9. Assuming that the firm is maximizing profits, the marginal cost of the last unit produced equals

Accepted Answer

A)  $4.
B)  $40.
C)  $5.
D)  $50.
E)  $6.F) A) and C)
G) None of the above

Question 18

Exhibit 23-10 
Refer to Exhibit 23-10. The profit-maximizing single-price monopolist earns profits equal to what area?

Accepted Answer

A)  ABGH
B)  HGCD
C)  DCE
D)  ABCD
E)  GFCF) A) and E)
G) C) and D)

Question 19

By adhering to the MR = MC rule, a single-price monopoly

Accepted Answer

A)  will always have an above-zero profit.
B)  will always have a normal profit.
C)  maximizes its profit, which may in some cases mean minimizing its losses.
D)  is not earning as large a profit as it can by setting MR = (MC - P) .E) A) and D)
F) A) and B)

Question 20

Cents-off coupons can be seen as a form of third-degree price discrimination.

Accepted Answer

A) True 
 B)False

Exam 10: Monopoly

Exhibit 23-6 Refer to Exhibit 23-6. If C is the demand curve facing a perfectly price-discriminating monopolist selling qC units of X, its marginal revenue curve is

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In maximizing profits, a single-price monopolist will charge a price that is

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Exhibit 23-7 Refer to Exhibit 23-7. Let D be the demand curve facing a perfectly price-discriminating monopolist. The marginal revenue it receives from selling the 150th unit of good X sold equals

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By adhering to the MR = MC rule, a single-price monopoly

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The ________________________ Acts, passed by the British Parliament in the 1760s, imposed taxes on a variety of products imported into the American colonies.

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Exhibit 23-8 Refer to Exhibit 23-8. Average total cost at the profit-maximizing level of output equals

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Exhibit 23-4 Refer to Exhibit 23-4. The profit-maximizing single-price monopolist's maximum profit is

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Exhibit 23-10 Refer to Exhibit 23-10. The profit-maximizing single-price monopolist earns profits equal to what area?

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At one time, monopolies were granted to people who were in the favor of kings and queens.

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A right granted to a firm by government that permits the firm to provide a particular good or service and excludes others from doing the same is called

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Cents-off coupons can be seen as a form of third-degree price discrimination.

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Public franchises, patents, and government licenses are examples of __________ barriers to entry.

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Both a price taker and a price searcher maximize profits (or minimize losses) by producing the quantity of output at which __________ equals __________.

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Which of the following is an assumption of the theory of monopoly?

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Suppose a monopolist practices perfect price discrimination. Its marginal revenue curve

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Exhibit 23-9 Refer to Exhibit 23-9. Assuming that the firm is maximizing profits, the marginal cost of the last unit produced equals

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Exhibit 23-8 Refer to Exhibit 23-8. The maximum profits earned by this single-price monopolist will be

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The term "arbitrage" refers to

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A single-price monopolist

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Economic rent is a payment received in excess of marginal cost.

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Exhibit 23-6 Refer to Exhibit 23-6. If C is the demand curve facing a perfectly price-discriminating monopolist selling q_C units of X, its marginal revenue curve is

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Both a price taker and a price searcher maximize profits (or minimize losses) by producing the quantity of output at which equals .

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