Question 1

Price discrimination explains why many universities often set rules that determine prices of admission (or financial aid) .What characteristic of students is this based on

Accepted Answer

A)  their age
B)  their financial resources
C)  their high school GPA
D)  their genderE) A) and B)
F) A) and C)

Question 2

Which of the following is NOT an example of price discrimination

Accepted Answer

A)  Airline charges a lower price for round trips than single trips.
B)  Many colleges and universities give financial aid to needy students.
C)  Discount coupons are available free to the public.
D)  Prices are different at different gas stations throughout the city.E) A) and D)
F) C) and D)

Question 3

For which item is it sometimes meaningful for a monopoly to consider negative values

Accepted Answer

A)  marginal revenue
B)  average revenue
C)  marginal cost
D)  average total costE) A) and C)
F) C) and D)

Question 4

For a profit-maximizing monopolist,when should output be increased to enhance economic well-being

Accepted Answer

A)  as long as average revenue exceeds marginal cost
B)  as long as average revenue exceeds average total cost
C)  as long as marginal revenue exceeds marginal cost
D)  as long as marginal revenue exceeds average total costE) A) and B)
F) A) and D)

Question 5

Assume that a monopolist decides to maximize revenue rather than profit. How does this operating objective change the size of the deadweight loss? If you are a “benevolent” manager of a monopoly firm and are interested in reducing the deadweight loss of monopoly, should you maximize profits or maximize revenue? Carefully explain your answer.

Accepted Answer

A revenue maximizer operates where MR = ...

Question 6

What do we know about a monopoly's marginal cost

Accepted Answer

A)  It will be less than its average fixed cost.
B)  It will be less than the price per unit of its product.
C)  It will exceed its marginal revenue.
D)  It will equal its average total cost.E) None of the above
F) B) and C)

Question 7

What shape of demand curves do competitive firms have,and how much output can they sell

Accepted Answer

A)  They have downward-sloping demand curves, and they can sell as much output as they desire at the market price.
B)  They have downward-sloping demand curves, and they can sell only a limited quantity of output at each price.
C)  They have horizontal demand curves, and they can sell as much output as they desire at the market price.
D)  They have horizontal demand curves, and they can sell only a limited quantity of output at each price.E) A) and B)
F) B) and C)

Question 8

When does a natural monopoly occur

Accepted Answer

A)  when the product is sold in its natural state (such as water or diamonds) 
B)  when there are economies of scale over the relevant range of output
C)  when the firm is characterized by a rising marginal-cost curve
D)  when production requires the use of free natural resources, such as water or airE) C) and D)
F) B) and D)

Question 9

Under which circumstance can a firm that has a monopoly on water (which is a necessity)  charge a high price for water

Accepted Answer

A)  only if the marginal cost of producing water is high
B)  even if the marginal cost of producing water is low
C)  only if the firm is a natural monopoly
D)  even if the demand for water is lowE) None of the above
F) A) and B)

Question 10

When does a natural monopoly arise

Accepted Answer

A)  when there are constant returns to scale over the relevant range of output
B)  when there are economies of scale over the relevant range of output
C)  when one firm owns a key natural resource
D)  when the government gives a single firm the exclusive right to produce a particular good or serviceE) A) and C)
F) B) and C)

Question 11

Which statement represents a monopoly firm

Accepted Answer

A)  A monopoly firm is a price taker and has no supply curve.
B)  A monopoly firm is a price maker and has no supply curve.
C)  A monopoly firm is a price taker and has a downward-sloping demand curve.
D)  A monopoly firm is a price maker and has an upward-sloping supply curve.E) A) and D)
F) A) and B)

Question 12

Figure 15-3
The figure below reflects the cost and revenue structure for a monopoly firm.
 
-Refer to Figure 15-3.What would profit be on a typical unit sold for a profit-maximizing monopoly

Accepted Answer

A)  P₂ - P₀
B)  P₂ - P₁
C)  P₃ - P₀
D)  P₃ - P₁E) All of the above
F) A) and B)

Question 13

A monopoly firm can sell 200 units of output for $36.00 per unit.Alternatively,it can sell 201 units of output for $35.50 per unit.What is the marginal revenue of the 201st unit of output

Accepted Answer

A)  -$35.50
B)  -$64.50
C)  $64.50
D)  $35.50E) None of the above
F) B) and C)

Question 14

What shape of demand curves do monopoly firms have,and how much output can they sell

Accepted Answer

A)  They have downward-sloping demand curves, and they can sell as much output as they desire at the market price.
B)  They have downward-sloping demand curves, and they can sell only a limited quantity of output at each price.
C)  They have horizontal demand curves, and they can sell as much output as they desire at the market price.
D)  They have horizontal demand curves, and they can sell only a limited quantity of output at each price.E) C) and D)
F) A) and B)

Question 15

Scenario 15-1
Consider the market for water in a small town in the Old West.Assume that the only source of water is the underground aquifer that lies directly below the town.Wells are used to supply water to the entire town.
-Refer to Scenario 15-1.Assume that Jack is the sole owner of all the wells in town.He decides to move to a more suitable climate and sells the wells to a couple of dozen different town residents.What will be the result

Accepted Answer

A)  The town residents will likely be worse off.
B)  The price of water is likely to rise.
C)  The individual water sellers will not have as many customers as Jack had.
D)  More water will be offered for sale.E) A) and B)
F) All of the above

Question 16

In theory,which outcome occurs with perfect price discrimination

Accepted Answer

A)  It decreases the monopolist's profits.
B)  It decreases consumer surplus.
C)  It increases deadweight loss.
D)  It decreases total output.E) None of the above
F) All of the above

Question 17

How is a monopolist's profit-maximizing quantity of output determined

Accepted Answer

A)  by the intersection of the marginal-revenue curve and the marginal-cost curve
B)  by the intersection of the marginal-revenue curve and the average-total-cost curve
C)  by the intersection of the average revenue curve and the marginal-cost curve
D)  by the intersection of the demand curve and the average-total-cost curveE) A) and B)
F) A) and C)

Question 18

Figure 15-2
The figure below reflects the cost and revenue structure for a monopoly firm.
 
-Refer to Figure 15-2.Which curve depicts the marginal-revenue curve for a monopoly firm

Accepted Answer

A)  A
B)  B
C)  C
D)  DE) None of the above
F) All of the above

Question 19

Table 15-1
 
-Refer to Table 15-1.What is the marginal revenue for the monopolist for the sixth unit sold

Accepted Answer

A)  $3
B)  $5
C)  $8
D)  $11E) B) and D)
F) B) and C)

Exam 15: Monopoly

Figure 15-3 The figure below reflects the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.What would profit be on a typical unit sold for a profit-maximizing monopoly

Correct Answer
verified

Which of the following is NOT an example of price discrimination

Correct Answer
verified

What do we know about a monopoly's marginal cost

Correct Answer
verified

How is a monopolist's profit-maximizing quantity of output determined

Correct Answer
verified

Correct Answer
verified

Which statement represents a monopoly firm

Correct Answer
verified

When does a natural monopoly occur

Correct Answer
verified

Figure 15-2 The figure below reflects the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.Which curve depicts the marginal-revenue curve for a monopoly firm

Correct Answer
verified

In theory,which outcome occurs with perfect price discrimination

Correct Answer
verified

For a profit-maximizing monopolist,when should output be increased to enhance economic well-being

Correct Answer
verified

A monopoly firm can sell 200 units of output for $36.00 per unit.Alternatively,it can sell 201 units of output for $35.50 per unit.What is the marginal revenue of the 201st unit of output

Correct Answer
verified

What shape of demand curves do competitive firms have,and how much output can they sell

Correct Answer
verified

When does a natural monopoly arise

Correct Answer
verified

For which item is it sometimes meaningful for a monopoly to consider negative values

Correct Answer
verified

Under which circumstance can a firm that has a monopoly on water (which is a necessity) charge a high price for water

Correct Answer
verified

Price discrimination explains why many universities often set rules that determine prices of admission (or financial aid) .What characteristic of students is this based on

Correct Answer
verified

Table 15-1 -Refer to Table 15-1.What is the marginal revenue for the monopolist for the sixth unit sold

Correct Answer
verified

Correct Answer
verified
A revenue maximizer operates where MR = ...
View Answer

What shape of demand curves do monopoly firms have,and how much output can they sell

Correct Answer
verified

Exam 15: Monopoly

Figure 15-3 The figure below reflects the cost and revenue structure for a monopoly firm. -Refer to Figure 15-3.What would profit be on a typical unit sold for a profit-maximizing monopoly

Correct AnswerverifiedShow Answer

Which of the following is NOT an example of price discrimination

Correct AnswerverifiedShow Answer

What do we know about a monopoly's marginal cost

Correct AnswerverifiedShow Answer

How is a monopolist's profit-maximizing quantity of output determined

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which statement represents a monopoly firm

Correct AnswerverifiedShow Answer

When does a natural monopoly occur

Correct AnswerverifiedShow Answer

Figure 15-2 The figure below reflects the cost and revenue structure for a monopoly firm. -Refer to Figure 15-2.Which curve depicts the marginal-revenue curve for a monopoly firm

Correct AnswerverifiedShow Answer

In theory,which outcome occurs with perfect price discrimination

Correct AnswerverifiedShow Answer

For a profit-maximizing monopolist,when should output be increased to enhance economic well-being

Correct AnswerverifiedShow Answer

A monopoly firm can sell 200 units of output for $36.00 per unit.Alternatively,it can sell 201 units of output for $35.50 per unit.What is the marginal revenue of the 201st unit of output

Correct AnswerverifiedShow Answer

What shape of demand curves do competitive firms have,and how much output can they sell

Correct AnswerverifiedShow Answer

When does a natural monopoly arise

Correct AnswerverifiedShow Answer

For which item is it sometimes meaningful for a monopoly to consider negative values

Correct AnswerverifiedShow Answer

Under which circumstance can a firm that has a monopoly on water (which is a necessity) charge a high price for water

Correct AnswerverifiedShow Answer

Price discrimination explains why many universities often set rules that determine prices of admission (or financial aid) .What characteristic of students is this based on

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1.What is the marginal revenue for the monopolist for the sixth unit sold

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA revenue maximizer operates where MR = ...View AnswerShow Answer

What shape of demand curves do monopoly firms have,and how much output can they sell

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A revenue maximizer operates where MR = ...
View Answer

Correct Answer
verified