Question 1

What do economists call the business practice of selling the same good at difference prices to different customers?

Accepted Answer

A)  Price discrimination
B)  Collusion
C)  Compensating differential
D)  Both a and b are correctE) All of the above
F) A) and B)

Question 2

The collection of statutes aimed at curbing monopoly power is called

Accepted Answer

A)  the 14th amendment.
B)  the Clayton Act.
C)  the Sherman Act.
D)  antitrust law.E) A) and B)
F) None of the above

Question 3

Angelo is a wholesale meatball distributor.He sells his meatballs to all the finest Italian restaurants in town.Nobody can make meatballs like Angelo.As a result,his is the only business in town that sells meatballs to restaurants.Assuming that Angelo is maximizing his profit,which of the following statements is true?

Accepted Answer

A)  Meatball prices will be less than marginal cost.
B)  Meatball prices will equal marginal cost.
C)  Meatball prices will exceed marginal cost.
D)  Meatball prices will be a function of supply and demand and will therefore oscillate around marginal costs.E) All of the above
F) None of the above

Question 4

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Accepted Answer

The private monopolist is governed by the market.Even though the market solution is sub-optimal,it may be better than outcomes generated by publicly owned monopolies.Publicly owned monopolies may restrict output to levels below the private market outcome and thus generate an even lower level of social surplus than a private profit-maximizing monopolist.They also may not work to reduce costs.

Question 5

When a firm's average total cost curve continually declines,the firm is a

Accepted Answer

A)  government-created monopoly.
B)  natural monopoly.
C)  revenue monopoly.
D)  All of the above are correct.E) None of the above
F) All of the above

Question 6

Figure 15-3
The figure below illustrates the cost and revenue structure for a monopoly firm.
 
-Refer to Figure 15-3.At the profit-maximizing level of output,

Accepted Answer

A)  marginal revenue is equal to P₃.
B)  marginal cost is equal to P₃.
C)  average revenue is equal to P₃.
D)  average total cost is equal to P₁.E) A) and B)
F) A) and C)

Question 7

Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.
 
-Refer to Figure 15-2.The demand curve for a monopoly firm is depicted by curve

Accepted Answer

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

Question 8

Figure 15-3
The figure below illustrates the cost and revenue structure for a monopoly firm.
 
-Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A)  P₃ × Q₂.
B)  P₂ × Q₄.
C)  (P₃ - P₀)  × Q₂.
D)  (P₃ - P₀)  × Q₄.E) B) and C)
F) None of the above

Question 9

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.

Accepted Answer

A)  $60
B)  $70
C)  $100
D)  $120E) A) and C)
F) A) and B)

Question 10

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" is called the

Accepted Answer

A)  Morgan Act.
B)  Sherman Act.
C)  Clayton Act.
D)  14th Amendment.E) C) and D)
F) A) and B)

Question 11

A profit-maximizing monopolist will produce the level of output at which

Accepted Answer

A)  average revenue is equal to average total cost.
B)  average revenue is equal to marginal cost.
C)  marginal revenue is equal to marginal cost.
D)  total revenue is equal to opportunity cost.E) B) and C)
F) None of the above

Question 12

Figure 15-7
The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist.
 
-Refer to Figure 15-7.If the monopoly firm is NOT allowed to price discriminate,then the deadweight loss amounts to

Accepted Answer

A)  $50.
B)  $100.
C)  $500.
D)  $1,000.E) B) and C)
F) A) and C) D

Question 13

Monopoly firms have

Accepted Answer

A)  downward-sloping demand curves and they can sell as much output as they desire at the market price.
B)  downward-sloping demand curves and they can sell only a limited quantity of output at each price.
C)  horizontal demand curves and they can sell as much output as they desire at the market price.
D)  horizontal demand curves and they can sell only a limited quantity of output at each price.E) All of the above
F) None of the above

Question 14

The problem with monopolies is their ability (i) 	to do away with barriers to entry.
(ii) 	to price their product at a level that exceeds marginal cost.
(iii) 	to restrict output below the socially efficient level of production.

Accepted Answer

A)  (i)  and (ii) 
B)  (ii)  and (iii) 
C)  (iii)  only
D)  (i) , (ii) , and (iii) E) All of the above
F) B) and C)

Question 15

The amount that producers receive for a good minus their costs of producing it equals

Accepted Answer

A)  quantity supplied.
B)  supply price.
C)  producer gain.
D)  producer surplus.E) A) and C)
F) B) and C)

Question 16

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Accepted Answer

A)  price is higher than the socially-optimal price.
B)  price equals marginal revenue.
C)  price is the same as average revenue.
D)  maximizes profit where marginal revenue equals marginal cost.E) B) and C)
F) A) and D)

Question 17

For a monopolist,when does marginal revenue exceed average revenue?

Accepted Answer

A)  Never
B)  When output is less than the profit-maximizing level of output
C)  When output is greater than the profit-maximizing level of output
D)  For all levels of output greater than zero.E) A) and C)
F) A) and B)

Question 18

When a single firm can supply a product to an entire market at a smaller cost than could two or more firms,the industry is called a

Accepted Answer

A)  resource industry.
B)  exclusive industry.
C)  government monopoly.
D)  natural monopoly.E) None of the above
F) B) and C)

Question 19

In the diagram below,which area represents the deadweight loss from monopoly?

Accepted Answer

A)  E
B)  H
C)  C+D+E
D)  E+HE) A) and B)
F) All of the above D

Question 20

For a profit-maximizing monopolist,

Accepted Answer

A) P > MR = MC. B) P = MR = MC. C) P > MR > MC. D) MR < MC < P.E) A) and C) F) None of the above

Exam 15: Monopoly

What do economists call the business practice of selling the same good at difference prices to different customers?

Correct Answer
verified

The collection of statutes aimed at curbing monopoly power is called

Correct Answer
verified

Correct Answer
verified

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

When a firm's average total cost curve continually declines,the firm is a

Correct Answer
verified

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.At the profit-maximizing level of output,

Correct Answer
verified

Figure 15-2 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.The demand curve for a monopoly firm is depicted by curve

Correct Answer
verified

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Correct Answer
verified

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.

Correct Answer
verified

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" is called the

Correct Answer
verified

A profit-maximizing monopolist will produce the level of output at which

Correct Answer
verified

Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist. -Refer to Figure 15-7.If the monopoly firm is NOT allowed to price discriminate,then the deadweight loss amounts to

Correct Answer
verified
D

Monopoly firms have

Correct Answer
verified

The problem with monopolies is their ability (i) to do away with barriers to entry. (ii) to price their product at a level that exceeds marginal cost. (iii) to restrict output below the socially efficient level of production.

Correct Answer
verified

The amount that producers receive for a good minus their costs of producing it equals

Correct Answer
verified

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Correct Answer
verified

For a monopolist,when does marginal revenue exceed average revenue?

Correct Answer
verified

When a single firm can supply a product to an entire market at a smaller cost than could two or more firms,the industry is called a

Correct Answer
verified

In the diagram below,which area represents the deadweight loss from monopoly?

Correct Answer
verified
D

For a profit-maximizing monopolist,

Correct Answer
verified

Exam 15: Monopoly

What do economists call the business practice of selling the same good at difference prices to different customers?

Correct AnswerverifiedShow Answer

The collection of statutes aimed at curbing monopoly power is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

When a firm's average total cost curve continually declines,the firm is a

Correct AnswerverifiedShow Answer

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.At the profit-maximizing level of output,

Correct AnswerverifiedShow Answer

Figure 15-2 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.The demand curve for a monopoly firm is depicted by curve

Correct AnswerverifiedShow Answer

Figure 15-3 The figure below illustrates the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.A profit-maximizing monopoly's total revenue is equal to

Correct AnswerverifiedShow Answer

What is the monopolist's profit under the following conditions? The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.Average total cost for 10 units of output is $5.

Correct AnswerverifiedShow Answer

The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" is called the

Correct AnswerverifiedShow Answer

A profit-maximizing monopolist will produce the level of output at which

Correct AnswerverifiedShow Answer

Figure 15-7 The figure below depicts the demand, marginal revenue, and marginal cost curves of a profit-maximizing monopolist. -Refer to Figure 15-7.If the monopoly firm is NOT allowed to price discriminate,then the deadweight loss amounts to

Correct AnswerverifiedD

Monopoly firms have

Correct AnswerverifiedShow Answer

The problem with monopolies is their ability (i) to do away with barriers to entry. (ii) to price their product at a level that exceeds marginal cost. (iii) to restrict output below the socially efficient level of production.

Correct AnswerverifiedShow Answer

The amount that producers receive for a good minus their costs of producing it equals

Correct AnswerverifiedShow Answer

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Correct AnswerverifiedShow Answer

For a monopolist,when does marginal revenue exceed average revenue?

Correct AnswerverifiedShow Answer

When a single firm can supply a product to an entire market at a smaller cost than could two or more firms,the industry is called a

Correct AnswerverifiedShow Answer

In the diagram below,which area represents the deadweight loss from monopoly?

Correct AnswerverifiedD

For a profit-maximizing monopolist,

Correct AnswerverifiedShow Answer

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D

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D

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