Question 1

Use the following to answer questions :
Figure: Monopoly Model  MC. B)  consumers are confronted with a price that is lower than marginal cost. C)  consumers will buy more of the good than is economically efficient. D)  consumers are confronted with a price that is lower than average total cost." class="answers-bank-image d-inline" rel="preload" >
-In monopoly:

Accepted Answer

A)   a basic condition for efficiency is violated because P > MC.
B)   consumers are confronted with a price that is lower than marginal cost.
C)   consumers will buy more of the good than is economically efficient.
D)   consumers are confronted with a price that is lower than average total cost.E) A) and C)
F) A) and D)

Question 2

Use the following to answer questions :
Figure: PPV 
-(Figure: PPV) Use Figure: PPV.The figure shows the demand and marginal revenue for a pay-per-view football game on cable TV.Assume that the marginal cost and average cost are a constant $20.If the cable company is a monopoly,how much total surplus is there when the monopolist maximizes profit?

Accepted Answer

A)   $240
B)   $160
C)   $100
D)   $320E) B) and D)
F) B) and C)

Question 3

At a monopoly's profit-maximizing level of output:

Accepted Answer

A)   marginal revenue equals marginal cost.
B)   marginal revenue is greater than marginal cost.
C)   marginal revenue is less than marginal cost.
D)   price is less than marginal cost.E) B) and C)
F) All of the above

Question 4

A monopolist responds to a decrease in demand by _____ price and _____ output.

Accepted Answer

A)   increasing;decreasing
B)   increasing;increasing
C)   decreasing;increasing
D)   decreasing;decreasingE) B) and D)
F) B) and C)

Question 5

Use the following to answer questions :
Figure: Monopoly Model 
-If the government allowed only one airline to serve the entire U.S.market,there would be a _____ loss associated with _____ output in the airline industry.

Accepted Answer

A)   marginal;reduced
B)   deadweight;reduced
C)   total;increased
D)   deadweight;increasedE) B) and C)
F) A) and B)

Question 6

Use the following to answer questions :
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price) Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,total surplus is:

Accepted Answer

A)   $3 200.
B)   $4 800
C)   $1 000.
D)   $1 600.E) A) and B)
F) B) and C)

Question 7

Use the following to answer questions :
Scenario: Monopolist
The demand curve for a monopolist is P = 75 -- 0.5Q,and the monopolist's marginal cost curve is defined using the equation MC = 2Q.Assume also that ATC at the profit-maximizing level of production is equal to $12.50.
-(Scenario: Monopolist) Use Scenario: Monopolist.At the profit-maximizing level of output,the profit per unit is:

Accepted Answer

A)   $62.50.
B)   $0.00
C)   $75.00.
D)   $50.00.E) A) and B)
F) A) and C)

Question 8

Use the following to answer questions :
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price) Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.If this were a perfectly competitive industry,total surplus would be:

Accepted Answer

A)   $6,400.
B)   $1,600.
C)   $3,200.
D)   $4,800.E) B) and D)
F) B) and C)

Question 9

Use the following to answer questions :
Figure: The Profit-Maximizing Output and Price 
-(Figure: The Profit-Maximizing Output and Price) Use Figure: The Profit-Maximizing Output and Price.Assume that there are no fixed costs and AC = MC = $200.At the profit-maximizing output and price for a monopolist,producer surplus is:

Accepted Answer

A)   $3 200.
B)   $6 400.
C)   $1 000.
D)   $1 600.E) None of the above
F) All of the above

Question 10

Use the following to answer questions :
Figure: Computing Monopoly Profit  0. D)  result in the firm breaking even." class="answers-bank-image d-inline" rel="preload" >
-(Figure: Computing Monopoly Profit) Use Figure: Computing Monopoly Profit.Producing at point N would:

Accepted Answer

A)   result in MR = MC.
B)   result in positive economic profits.
C)   never be profit-maximizing since,at this output,MR  0.
D)   result in the firm breaking even.E) B) and D)
F) B) and C)

Question 11

When a monopolist practises price discrimination,consumer surplus will be higher than the consumer surplus in a single-price monopoly.

Accepted Answer

A) True 
 B)False

Question 12

After the first unit sold,the marginal revenue a monopolist receives from selling one more unit of a good is less than the price of that unit because of:

Accepted Answer

A)   diminishing marginal returns.
B)   increasing marginal cost.
C)   a downward sloping demand curve.
D)   declining average fixed cost.E) None of the above
F) A) and D)

Question 13

Which statement about the differences between monopoly and perfect competition is INCORRECT?

Accepted Answer

A)   A monopolist has market power,while a perfect competitor does not.
B)   Unlike a perfectly competitive firm,a monopoly can make positive economic profits in the long run.
C)   A monopoly will charge a higher price and produce a smaller quantity than will a competitive market with the same demand and cost structure.
D)   Monopoly profits can continue in the long run because the monopoly produces more and charges a higher price than does a comparable perfectly competitive industry.E) A) and B)
F) All of the above

Question 14

When a monopolist practices price discrimination,compared with a single-price monopolist,producer surplus will:

Accepted Answer

A)   remain the same.
B)   increase.
C)   decrease.
D)   increase initially and then return to its original level.E) C) and D)
F) A) and B)

Question 15

The demand curve for a monopoly is:

Accepted Answer

A)   the MR curve above the AVC curve.
B)   the MR curve above the horizontal axis.
C)   the entire MR curve.
D)   above the MR curve.E) None of the above
F) A) and C)

Question 16

Price discrimination leads to a _____ price for consumers with a _____ demand.

Accepted Answer

A)   higher;less elastic
B)   higher;more elastic
C)   higher;perfectly elastic
D)   lower;less elasticE) A) and B)
F) None of the above

Question 17

An industry with a firm that is the only producer of a good or service for which there are no close substitutes and for which entry by potential rivals is prohibitively difficult is:

Accepted Answer

A)   a duopoly.
B)   a monopoly.
C)   an oligopoly.
D)   perfect competition.E) A) and C)
F) A) and B)

Question 18

Usually when a monopoly that isn't a natural monopoly is broken up,the losses to the producer outweigh the gains to consumers.

Accepted Answer

A) True 
 B)False

Question 19

Suppose the elasticity of demand for tickets to see a play in the Toronto Theatre District shows is 2.0 for men and 0.3 for women.To use price discrimination to increase profits,the producers should charge lower prices to _____ because their demand is more _____.

Accepted Answer

A)   men;elastic than that of women
B)   men;inelastic than that of women
C)   women;elastic than that of men
D)   women;inelastic than that of menE) C) and D)
F) A) and B)

Question 20

Use the following to answer questions :
Figure: PPV 
-(Figure: PPV) Use Figure: PPV.The figure shows the demand and marginal revenue for a pay-per-view football game on cable TV.Assume that the marginal cost and average cost are a constant $40.If the cable company practices perfect price discrimination,consumer surplus will be:

Accepted Answer

A)   $180.
B)   $100.
C)   $40.
D)   $0.E) None of the above
F) All of the above

Exam 13: Monopoly

An industry with a firm that is the only producer of a good or service for which there are no close substitutes and for which entry by potential rivals is prohibitively difficult is:

Correct Answer
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When a monopolist practices price discrimination,compared with a single-price monopolist,producer surplus will:

Correct Answer
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Price discrimination leads to a _ price for consumers with a _ demand.

Correct Answer
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At a monopoly's profit-maximizing level of output:

Correct Answer
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Suppose the elasticity of demand for tickets to see a play in the Toronto Theatre District shows is 2.0 for men and 0.3 for women.To use price discrimination to increase profits,the producers should charge lower prices to _ because their demand is more _.

Correct Answer
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When a monopolist practises price discrimination,consumer surplus will be higher than the consumer surplus in a single-price monopoly.

Correct Answer
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The demand curve for a monopoly is:

Correct Answer
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Use the following to answer questions : Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit) Use Figure: Computing Monopoly Profit.Producing at point N would:

Correct Answer
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A monopolist responds to a decrease in demand by _ price and _ output.

Correct Answer
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Use the following to answer questions : Figure: Monopoly Model -If the government allowed only one airline to serve the entire U.S.market,there would be a _ loss associated with _ output in the airline industry.

Correct Answer
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Which statement about the differences between monopoly and perfect competition is INCORRECT?

Correct Answer
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Use the following to answer questions : Figure: Monopoly Model -In monopoly:

Correct Answer
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After the first unit sold,the marginal revenue a monopolist receives from selling one more unit of a good is less than the price of that unit because of:

Correct Answer
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Usually when a monopoly that isn't a natural monopoly is broken up,the losses to the producer outweigh the gains to consumers.

Correct Answer
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Correct Answer
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Exam 13: Monopoly

An industry with a firm that is the only producer of a good or service for which there are no close substitutes and for which entry by potential rivals is prohibitively difficult is:

Correct AnswerverifiedShow Answer

When a monopolist practices price discrimination,compared with a single-price monopolist,producer surplus will:

Correct AnswerverifiedShow Answer

Price discrimination leads to a _____ price for consumers with a _____ demand.

Correct AnswerverifiedShow Answer

At a monopoly's profit-maximizing level of output:

Correct AnswerverifiedShow Answer

Suppose the elasticity of demand for tickets to see a play in the Toronto Theatre District shows is 2.0 for men and 0.3 for women.To use price discrimination to increase profits,the producers should charge lower prices to _____ because their demand is more _____.

Correct AnswerverifiedShow Answer

When a monopolist practises price discrimination,consumer surplus will be higher than the consumer surplus in a single-price monopoly.

Correct AnswerverifiedShow Answer

The demand curve for a monopoly is:

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: Computing Monopoly Profit -(Figure: Computing Monopoly Profit) Use Figure: Computing Monopoly Profit.Producing at point N would:

Correct AnswerverifiedShow Answer

A monopolist responds to a decrease in demand by _____ price and _____ output.

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: Monopoly Model -If the government allowed only one airline to serve the entire U.S.market,there would be a _____ loss associated with _____ output in the airline industry.

Correct AnswerverifiedShow Answer

Which statement about the differences between monopoly and perfect competition is INCORRECT?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: Monopoly Model -In monopoly:

Correct AnswerverifiedShow Answer

After the first unit sold,the marginal revenue a monopolist receives from selling one more unit of a good is less than the price of that unit because of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Usually when a monopoly that isn't a natural monopoly is broken up,the losses to the producer outweigh the gains to consumers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Price discrimination leads to a _ price for consumers with a _ demand.

Correct Answer
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Correct Answer
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Suppose the elasticity of demand for tickets to see a play in the Toronto Theatre District shows is 2.0 for men and 0.3 for women.To use price discrimination to increase profits,the producers should charge lower prices to _ because their demand is more _.

Correct Answer
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A monopolist responds to a decrease in demand by _ price and _ output.

Correct Answer
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Use the following to answer questions : Figure: Monopoly Model -If the government allowed only one airline to serve the entire U.S.market,there would be a _ loss associated with _ output in the airline industry.

Correct Answer
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