Question 1

Efforts by a firm to obtain a monopoly

Accepted Answer

A)   are called price discrimination.
B)   are called rent seeking.
C)   increase consumer surplus.
D)   are called price taking.

Question 2

A deadweight loss occurs whenever

Accepted Answer

A)   the marginal social benefit of a good does not equal its marginal social cost.
B)   there is perfect price discrimination.
C)   the total benefit of a good does not equal its total cost.
D)   there is no consumer surplus.

Question 3

If a natural monopoly is allowed to set its price above its average total cost, then

Accepted Answer

A)   the company incurs an economic loss.
B)   competitors will enter the market.
C)   the company makes an economic profit.
D)   the company will produce more than the efficient amount of output.

Question 4

Price discrimination takes place when a firm

Accepted Answer

A)   charges different prices for different units of its product.
B)   is discriminated against by consumers.
C)   charges the same price for all the units of its product that it sells.
D)   None of the above answers is correct.

Question 5

For a monopoly, at the level of output where marginal revenue equals zero, then the

Accepted Answer

A)   firm is a price taker.
B)   price elasticity of demand at this amount of output is zero.
C)   firm has maximised total revenue.
D)   firm earns no revenue.

Question 6

-The unregulated, single- price monopoly shown in the figure above will sell

Accepted Answer

A)   50 tickets.
B)   100 tickets.
C)   less than 30 tickets.
D)   30 tickets.

Question 7

A natural monopoly

Accepted Answer

A)   is not protected by any barrier to entry.
B)   exists because of legal barriers to entry.
C)   is an industry where two or more smaller firms can supply the market at a lower cost than one big firm could.
D)   is an industry in which economies of scale exist at the level of output where the market demand curve intersects the long- run average cost curve.

Question 8

Compared to a single- price monopolist, a price- discriminating monopolist

Accepted Answer

A)   produces more output.
B)   produces less output but charges a lower price.
C)   generates a larger deadweight loss.
D)   produces the same amount of output but charges a higher price.

Question 9

Demand Schedule Facing a Perfectly Price- Discriminating Firm
 
-Using the demand schedule in the above table, the marginal revenue for a perfectly price- discriminating monopolist from the sale of the third unit of output is

Accepted Answer

A)   $6.
B)   $5.
C)   $3.
D)   $4.

Question 10

Demand Schedule Facing a Perfectly Price- Discriminating Firm
 
-Using the demand schedule in the above table, if the firm's marginal cost is constant at $3.00, output for a perfectly price- discriminating monopolist is

Accepted Answer

A)   4 units.
B)   2 units.
C)   5 units.
D)   3 units.

Exam 10: Monopoly and Its Regulation

-The unregulated, single- price monopoly shown in the figure above will sell

Correct Answer
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If a natural monopoly is allowed to set its price above its average total cost, then

Correct Answer
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Compared to a single- price monopolist, a price- discriminating monopolist

Correct Answer
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Demand Schedule Facing a Perfectly Price- Discriminating Firm -Using the demand schedule in the above table, if the firm's marginal cost is constant at $3.00, output for a perfectly price- discriminating monopolist is

Correct Answer
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A natural monopoly

Correct Answer
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A deadweight loss occurs whenever

Correct Answer
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For a monopoly, at the level of output where marginal revenue equals zero, then the

Correct Answer
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Price discrimination takes place when a firm

Correct Answer
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Efforts by a firm to obtain a monopoly

Correct Answer
verified

Demand Schedule Facing a Perfectly Price- Discriminating Firm -Using the demand schedule in the above table, the marginal revenue for a perfectly price- discriminating monopolist from the sale of the third unit of output is

Correct Answer
verified

Exam 10: Monopoly and Its Regulation

-The unregulated, single- price monopoly shown in the figure above will sell

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If a natural monopoly is allowed to set its price above its average total cost, then

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Compared to a single- price monopolist, a price- discriminating monopolist

Correct AnswerverifiedShow Answer

Demand Schedule Facing a Perfectly Price- Discriminating Firm -Using the demand schedule in the above table, if the firm's marginal cost is constant at $3.00, output for a perfectly price- discriminating monopolist is

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A natural monopoly

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A deadweight loss occurs whenever

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For a monopoly, at the level of output where marginal revenue equals zero, then the

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Price discrimination takes place when a firm

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Efforts by a firm to obtain a monopoly

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Demand Schedule Facing a Perfectly Price- Discriminating Firm -Using the demand schedule in the above table, the marginal revenue for a perfectly price- discriminating monopolist from the sale of the third unit of output is

Correct AnswerverifiedShow Answer

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