Filters
Question type
Study Flashcards

If a monopolist is maximizing profits, then it is producing an amount of output so that


A) MR = ATC.
B) MC = AVC.
C) MR = TC.
D) MR = MC.

Correct Answer

verifed

verified

-The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR) , marginal cost (MC) , and average cost (LRAC) curves. If Visual is regulated according to an average cost pricing rule, it will serve ________ million households and set a price of ________ per household per month. A) 1; $48 B) 4; $12 C) 2; $36 D) 3; $24 -The figure above shows the demand curve (D) faced by Visual, Inc., a cable TV company, and the firm's marginal revenue (MR) , marginal cost (MC) , and average cost (LRAC) curves. If Visual is regulated according to an average cost pricing rule, it will serve ________ million households and set a price of ________ per household per month.


A) 1; $48
B) 4; $12
C) 2; $36
D) 3; $24

Correct Answer

verifed

verified

Which of the following is necessary for a monopolist to price discriminate between groups?


A) The groups are identifiable.
B) The groups have different willingness to pay.
C) A customer from one group cannot resell to a customer in another group.
D) All of the above conditions are necessary for the monopolist to price discriminate.

Correct Answer

verifed

verified

-If the firm in the figure above is unregulated, the consumer surplus will be A) zero. B) $100. C) $400. D) $200. -If the firm in the figure above is unregulated, the consumer surplus will be


A) zero.
B) $100.
C) $400.
D) $200.

Correct Answer

verifed

verified

-Dee's TV Repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what quantity of TV repairs should Dee undertake? A) 0 per week B) 10 per week C) 20 per week D) 30 per week -Dee's TV Repair is the only TV repair shop in a small town. Dee is a single-price monopolist. Based on the demand and cost information in the table above, what quantity of TV repairs should Dee undertake?


A) 0 per week
B) 10 per week
C) 20 per week
D) 30 per week

Correct Answer

verifed

verified

-In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does NOT inflate its costs, then the firm will produce A) 8 million units and set a price of $21 per unit. B) 12 million units and set a price of $18 per unit. C) 16 million units and set a price of $16 per unit. D) nothing unless the government provides subsidies to cover its losses. -In the above figure, if the natural monopoly is regulated with an average cost pricing rule and the firm does NOT inflate its costs, then the firm will produce


A) 8 million units and set a price of $21 per unit.
B) 12 million units and set a price of $18 per unit.
C) 16 million units and set a price of $16 per unit.
D) nothing unless the government provides subsidies to cover its losses.

Correct Answer

verifed

verified

Under an average cost pricing rule, a regulated natural monopoly ________ and there is ________.


A) makes an economic profit; a deadweight loss
B) makes zero economic profit; no deadweight loss
C) makes zero economic profit; a deadweight loss.
D) incurs an economic loss; no deadweight loss

Correct Answer

verifed

verified

-Roxie's Movie Theatre has a monopoly and discovers that at $12 a movie, no one is buying movie tickets during weekdays. Roxie's conducts a survey and the table above reveals the results of the survey. Roxie decides to price discriminate between weekend and weekday moviegoers. The marginal cost of a showing a movie is $6. Roxie's charges ________ on weekdays and ________ on weekends. A) $9; $12 B) $6; $15 C) $6; $18 D) $3; $12 -Roxie's Movie Theatre has a monopoly and discovers that at $12 a movie, no one is buying movie tickets during weekdays. Roxie's conducts a survey and the table above reveals the results of the survey. Roxie decides to price discriminate between weekend and weekday moviegoers. The marginal cost of a showing a movie is $6. Roxie's charges ________ on weekdays and ________ on weekends.


A) $9; $12
B) $6; $15
C) $6; $18
D) $3; $12

Correct Answer

verifed

verified

-The table above shows the demand and costs for a single-price monopolist. The firm can maximize its profit by setting its price at A) $30 per unit. B) $35 per unit. C) $40 per unit. D) $45 per unit. -The table above shows the demand and costs for a single-price monopolist. The firm can maximize its profit by setting its price at


A) $30 per unit.
B) $35 per unit.
C) $40 per unit.
D) $45 per unit.

Correct Answer

verifed

verified

Even though a perfect price discriminator can extract all of the consumer surplus, how can it be efficient?

Correct Answer

verifed

verified

Efficiency has nothing to do with who ge...

View Answer

The primary reason why a monopoly can make a long-run economic profit is the existence of


A) barriers to entry.
B) inelastic demand.
C) price discrimination.
D) many buyers.

Correct Answer

verifed

verified

Patents encourage invention by


A) offering subsidies to inventors.
B) offering tax breaks to inventors.
C) allowing patent owners to make an economic profit.
D) preventing inventors from working on the same project.

Correct Answer

verifed

verified

Compared to a single-price monopoly, a perfectly competitive market with the same costs produces ________ output and has a ________ price.


A) less; lower
B) less; higher
C) more; lower
D) more; higher

Correct Answer

verifed

verified

An unregulated monopoly will


A) flood the market with goods to deter entry.
B) produce only where marginal revenue is zero.
C) produce in the inelastic range of its demand curve.
D) produce in the elastic range of its demand curve.

Correct Answer

verifed

verified

Which of the following is definitely NOT an example of a natural monopoly?


A) local water distribution companies
B) urban rail services
C) local electric power and gas distribution companies
D) urban retail stores

Correct Answer

verifed

verified

-If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then total surplus will be A) $0. B) $4 million. C) $8 million. D) $16 million. -If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then total surplus will be


A) $0.
B) $4 million.
C) $8 million.
D) $16 million.

Correct Answer

verifed

verified

Compared to a competitive industry, a monopoly transfers


A) deadweight loss away from producers to consumers.
B) deadweight loss away from consumers to producers.
C) producer surplus to consumers.
D) consumer surplus to producers.

Correct Answer

verifed

verified

-In the figure above, the total revenue of a perfectly price-discriminating monopolist at the profit-maximizing output is equal to the area of A) 0aij. B) 0dgh. C) aci. D) obeij. -In the figure above, the total revenue of a perfectly price-discriminating monopolist at the profit-maximizing output is equal to the area of


A) 0aij.
B) 0dgh.
C) aci.
D) obeij.

Correct Answer

verifed

verified

-Natural gas is a natural monopoly. The figure above shows the market for natural gas in the city of Lucknow. When a marginal cost pricing rule regulation is imposed, the price per household per month is A) $30 and 20,000 household are served. B) $10 and 40,000 household are served. C) $10 and 20,000 household are served. D) $20 and 30,000 households are served. -Natural gas is a natural monopoly. The figure above shows the market for natural gas in the city of Lucknow. When a marginal cost pricing rule regulation is imposed, the price per household per month is


A) $30 and 20,000 household are served.
B) $10 and 40,000 household are served.
C) $10 and 20,000 household are served.
D) $20 and 30,000 households are served.

Correct Answer

verifed

verified

When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?

Correct Answer

verifed

verified

Using an average cost pricing rule, the ...

View Answer

Showing 241 - 260 of 599

Related Exams

Exam 1

What Is Economics

483 Questions

Exam 2

The Economic Problem

440 Questions

Exam 3

Demand and Supply

515 Questions

Exam 4

Elasticity

530 Questions

Exam 5

Efficiency and Equity

450 Questions

Exam 6

Government Actions in Markets

412 Questions

Exam 7

Global Markets in Action

205 Questions

Exam 8

Utility and Demand

366 Questions

Exam 10

Organizing Production

385 Questions

Exam 11

Output and Costs

493 Questions

Exam 12

Perfect Competition

487 Questions

Exam 14

Monopolistic Competition

318 Questions

Exam 15

Oligopoly

276 Questions

Exam 16

Public Choices, Public Goods, and Healthcare

205 Questions

Exam 17

Externalities

437 Questions

Exam 18

Markets for Factors of Production

382 Questions

Exam 19

Economic Inequality

351 Questions

Exam 20

Uncertainty and Information

233 Questions

Show Answer