Question 1

How does the monopolist calculate profit per unit, and total profit?

Accepted Answer

A monopolist computes profit per unit by...

Question 2

The U.S.government

Accepted Answer

A)  intervenes to prevent the monopolization of any market.
B)  forbids the creation of legal impediments to entry into any market.
C)  intervenes to prevent the monopolization of some markets and actively encourages the monopolization of others.
D)  encourages the permanent monopolization of all markets in which the monopolist has technical superiority over potential competitors.

Question 3

-In Table 11-2, marginal revenue at the profit-maximizing output is how much?

Accepted Answer

A)  $5 
B)  $7 
C)  $8 
D)  $110

Question 4

A monopoly firm always devotes some of its profits to research.

Accepted Answer

A) True 
 B)False

Question 5

The existence of a natural monopoly stems from the size of the firm relative to the total market demand for the product of that firm.

Accepted Answer

A) True 
 B)False

Question 6

It is possible that if a monopoly is broken up, the cost of production for that product could increase.

Accepted Answer

A) True 
 B)False

Question 7

Describe the types of entry barriers which can exist and their importance to the study of monopoly.

Accepted Answer

There are seven types of barriers discus...

Question 8

The key element in preserving a monopoly is

Accepted Answer

A)  government subsidy of critical enterprises.
B)  keeping potential rivals out of the market.
C)  guaranteeing availability of substitute products.
D)  increased advertising expenditure.

Question 9

A natural monopoly is characterized by the fact that its average costs increase rather than decrease when its output expands.

Accepted Answer

A) True 
 B)False

Question 10

Figure 11-6
 
-The industry described in Figure 11-6

Accepted Answer

A)  is not a natural monopoly because no firm would produce in the long run unless the government intervened in the market.
B)  is not a natural monopoly because the average total cost curve is U-shaped.
C)  is a natural monopoly because the economic profit is positive for a monopolist if the government doesn't intervene.
D)  is a natural monopoly because price is less than average total cost at the output that would be produced by the industry under perfect competition.

Question 11

Which of the following is true for a profit-maximizing competitive firm in the long run but not a monopolist?

Accepted Answer

A)  MC = MR 
B)  MC = P 
C)  AR = P 
D)  Q > 0

Question 12

There exist only two causes of monopoly: barriers to entry and government restrictions.

Accepted Answer

A) True 
 B)False

Question 13

Natural monopolies are of theoretical, but not practical interest.

Accepted Answer

A) True 
 B)False

Question 14

Explain how each of the following industries practices price discrimination:
a.movie theaters
b.airlines
c.auto dealers
d.U.S.Postal Service

Accepted Answer

a.Movie theaters charge different prices...

Question 15

Figure 11-7
 
-For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?

Accepted Answer

A)  100 
B)  75 
C)  50 
D)  25

Question 16

Although monopoly has lower output than competition, the level of output is efficient.

Accepted Answer

A) True 
 B)False

Question 17

At a given output level, a monopolist earns a profit only if the

Accepted Answer

A)  slope of its TR curve exceeds the slope of his TC curve.
B)  height of its MR curve exceeds the height of his MC curve.
C)  height of its demand curve exceeds the height of his MR curve.
D)  height of its demand curve exceeds the height of his ATC curve.

Question 18

Too much of society's scarce resources are used to produce goods in monopoly markets.

Accepted Answer

A) True 
 B)False

Question 19

Figure 11-7
 
-The firm in Figure 11-7 is an unregulated monopolist; it will earn long-run profits of how much?

Accepted Answer

A)  500 
B)  400 
C)  300 
D)  200

Question 20

Suppose a monopolist can charge different prices to different customers, such as doctors charging different prices depending on whether the patient is insured.How will profits and marginal revenue of such a price-discriminating monopolist compare to profits and MR of an ordinary monopolist who must charge all patients the same fee?

Accepted Answer

The price-discriminating monopolist will...

Exam 11: Monopoly

A natural monopoly is characterized by the fact that its average costs increase rather than decrease when its output expands.

Correct Answer
verified

It is possible that if a monopoly is broken up, the cost of production for that product could increase.

Correct Answer
verified

Correct Answer
verified
The price-discriminating monopolist will...
View Answer

There exist only two causes of monopoly: barriers to entry and government restrictions.

Correct Answer
verified

The existence of a natural monopoly stems from the size of the firm relative to the total market demand for the product of that firm.

Correct Answer
verified

-In Table 11-2, marginal revenue at the profit-maximizing output is how much?

Correct Answer
verified

At a given output level, a monopolist earns a profit only if the

Correct Answer
verified

Too much of society's scarce resources are used to produce goods in monopoly markets.

Correct Answer
verified

Explain how each of the following industries practices price discrimination: a.movie theaters b.airlines c.auto dealers d.U.S.Postal Service

Correct Answer
verified
a.Movie theaters charge different prices...
View Answer

Describe the types of entry barriers which can exist and their importance to the study of monopoly.

Correct Answer
verified
There are seven types of barriers discus...
View Answer

Figure 11-7 -For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?

Correct Answer
verified

How does the monopolist calculate profit per unit, and total profit?

Correct Answer
verified
A monopolist computes profit per unit by...
View Answer

Figure 11-7 -The firm in Figure 11-7 is an unregulated monopolist; it will earn long-run profits of how much?

Correct Answer
verified

The key element in preserving a monopoly is

Correct Answer
verified

Natural monopolies are of theoretical, but not practical interest.

Correct Answer
verified

A monopoly firm always devotes some of its profits to research.

Correct Answer
verified

Although monopoly has lower output than competition, the level of output is efficient.

Correct Answer
verified

The U.S.government

Correct Answer
verified

Figure 11-6 -The industry described in Figure 11-6

Correct Answer
verified

Which of the following is true for a profit-maximizing competitive firm in the long run but not a monopolist?

Correct Answer
verified

Exam 11: Monopoly

A natural monopoly is characterized by the fact that its average costs increase rather than decrease when its output expands.

Correct AnswerverifiedShow Answer

It is possible that if a monopoly is broken up, the cost of production for that product could increase.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe price-discriminating monopolist will...View AnswerShow Answer

There exist only two causes of monopoly: barriers to entry and government restrictions.

Correct AnswerverifiedShow Answer

The existence of a natural monopoly stems from the size of the firm relative to the total market demand for the product of that firm.

Correct AnswerverifiedShow Answer

-In Table 11-2, marginal revenue at the profit-maximizing output is how much?

Correct AnswerverifiedShow Answer

At a given output level, a monopolist earns a profit only if the

Correct AnswerverifiedShow Answer

Too much of society's scarce resources are used to produce goods in monopoly markets.

Correct AnswerverifiedShow Answer

Explain how each of the following industries practices price discrimination: a.movie theaters b.airlines c.auto dealers d.U.S.Postal Service

Correct Answerverifieda.Movie theaters charge different prices...View AnswerShow Answer

Describe the types of entry barriers which can exist and their importance to the study of monopoly.

Correct AnswerverifiedThere are seven types of barriers discus...View AnswerShow Answer

Figure 11-7 -For the firm in Figure 11-7, an unregulated monopolist, profit-maximizing output is below the long-run competitive level by how much?

Correct AnswerverifiedShow Answer

How does the monopolist calculate profit per unit, and total profit?

Correct AnswerverifiedA monopolist computes profit per unit by...View AnswerShow Answer

Figure 11-7 -The firm in Figure 11-7 is an unregulated monopolist; it will earn long-run profits of how much?

Correct AnswerverifiedShow Answer

The key element in preserving a monopoly is

Correct AnswerverifiedShow Answer

Natural monopolies are of theoretical, but not practical interest.

Correct AnswerverifiedShow Answer

A monopoly firm always devotes some of its profits to research.

Correct AnswerverifiedShow Answer

Although monopoly has lower output than competition, the level of output is efficient.

Correct AnswerverifiedShow Answer

The U.S.government

Correct AnswerverifiedShow Answer

Figure 11-6 -The industry described in Figure 11-6

Correct AnswerverifiedShow Answer

Which of the following is true for a profit-maximizing competitive firm in the long run but not a monopolist?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The price-discriminating monopolist will...
View Answer

Correct Answer
verified

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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a.Movie theaters charge different prices...
View Answer

Correct Answer
verified
There are seven types of barriers discus...
View Answer

Correct Answer
verified

Correct Answer
verified
A monopolist computes profit per unit by...
View Answer

Correct Answer
verified

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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