Question 1

A profit-maximizing monopoly will never operate in the portion of the demand curve with MR equal to

Accepted Answer

A)  3.
B)  2.
C)  1.
D)  -1.

Question 2

The difference between the marginal expenditure and the wage is greater when the supply curve of labor is

Accepted Answer

A)  less elastic at the monopsony optimum.
B)  more elastic at the monopsony optimum.
C)  more elastic than the demand curve.
D)  The difference does not depend on any elasticity.

Question 3

The optimal patent length is equal to 20 years.

Accepted Answer

A) True 
 B)False

Question 4

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Accepted Answer

Microsoft marketed Windows really well a...

Question 5

If a firm is able to set price,

Accepted Answer

A)  it is a monopoly.
B)  its marginal revenue is constant.
C)  it sells its output at a constant price.
D)  it faces a downward-sloping demand curve.

Question 6

Consider a monopolist facing a linear (inverse)demand curve given by:
p = a - bQ
Show with calculus that the marginal revenue in fact has the same price-axis intercept but twice the slope as the inverse demand curve above.

Accepted Answer

Total Reve...

Question 7

The situation in which one firm can produce the total output of the market at lower cost than several firms is called

Accepted Answer

A)  natural monopoly.
B)  pure monopoly.
C)  ruling monopoly.
D)  cost monopoly.

Question 8

The existence of a deadweight loss associated with a monopoly can be seen because

Accepted Answer

A)  consumers are willing to pay more for the last unit of output than it cost to produce.
B)  the cost of the last unit produced is more than consumers are willing to pay for it.
C)  the producer surplus is larger than in a competitive market.
D)  None of the above.

Question 9

Show with a graph that an increase in the minimum wage can increase the level of employment in a monopsony market.

Accepted Answer

A monopolist will select a level of empl...

Question 10

The introduction of satellite television systems would cause the demand curve for cable television to be

Accepted Answer

A)  more elastic.
B)  less elastic.
C)  perfectly inelastic.
D)  unchanged.

Question 11

The government forcing a monopoly telecommunications company to allow other firms to use its cables is an attempt to

Accepted Answer

A)  regulate prices.
B)  decrease the monopoly market power by eliminating a natural monopoly.
C)  decrease the monopoly market power by increasing competition.
D)  None of the above.

Question 12

If the inverse demand curve a monopoly faces is p = 100 - 2Q,then profit maximization

Accepted Answer

A)  is achieved when 25 units are produced.
B)  is achieved by setting price equal to 25.
C)  is achieved only by shutting down in the short run.
D)  cannot be determined solely from the information provided.

Question 13

-The above figure shows the demand and cost curves facing a monopoly.The deadweight loss of this monopoly is

Accepted Answer

A)  $100.
B)  $250.
C)  $1,250.
D)  $2,500.

Question 14

Which of the following measures are government regulations to increase competition?

Accepted Answer

A)  Government ends the ban on steel imports.
B)  Government shortens the term of the patent for a drug.
C)  Government subsidizes firms to enter energy market.
D)  All of above.

Question 15

The loss associated with the fact that at the profit-maximizing quantity consumers value the goods more than it cost to produce them is called

Accepted Answer

A)  deadweight loss.
B)  comparative loss.
C)  Lerner Loss.
D)  Consumer Value Loss.

Question 16

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

Accepted Answer

A)  the natural monopoly will shut down.
B)  the natural monopoly will still make high profits.
C)  the natural monopoly's marginal cost curve will shift up.
D)  total welfare is maximized.

Question 17

Under monopsony,the wage rate

Accepted Answer

A)  equals the marginal product of labor.
B)  equals the marginal revenue product of labor.
C)  is less than the marginal revenue product of labor.
D)  is greater than it would be under perfect competition.

Question 18

A monopolist faces a demand curve Q = 120 - 2p and has costs given by C(Q)= 20Q + 100.
a.Write the monopolist's profits in terms of the price it charges.
b.Use the derivative (w.r.t.price)to determine the monopolist's profit-maximizing price.
c.Now,derive the monopolist's inverse demand based on the demand equation above.Write out the monopolist's profits in terms of quantity.
d.Use the derivative w.r.t.Q to determine the monopolist's optimal quantity.What price does the monopoly charge?

Accepted Answer

a.(p)= (120 - 2p)p - 20(120 - 2p)- 100
b...

Question 19

For a monopsonist,the labor supply curve is upward sloping because

Accepted Answer

A)  the monopsonist must compete with other industries for that labor.
B)  the monopsonist requires that the laborers are highly skilled.
C)  the monopsonist is the only buyer in that labor market.
D)  the monopsonist restricts the supply of labor.

Question 20

Suppose a monopolist has TC = 100 + 10Q + 2Q2,and the demand curve it faces is
p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Accepted Answer

First,determine MR = 90 - 4Q.Second,MC =...

Exam 11: Monopoly and Monopsony

For a monopsonist,the labor supply curve is upward sloping because

Correct Answer
verified

Which of the following measures are government regulations to increase competition?

Correct Answer
verified

The difference between the marginal expenditure and the wage is greater when the supply curve of labor is

Correct Answer
verified

The situation in which one firm can produce the total output of the market at lower cost than several firms is called

Correct Answer
verified

The introduction of satellite television systems would cause the demand curve for cable television to be

Correct Answer
verified

Show with a graph that an increase in the minimum wage can increase the level of employment in a monopsony market.

Correct Answer
verified
A monopolist will select a level of empl...
View Answer

The existence of a deadweight loss associated with a monopoly can be seen because

Correct Answer
verified

A profit-maximizing monopoly will never operate in the portion of the demand curve with MR equal to

Correct Answer
verified

If the inverse demand curve a monopoly faces is p = 100 - 2Q,then profit maximization

Correct Answer
verified

The optimal patent length is equal to 20 years.

Correct Answer
verified

Consider a monopolist facing a linear (inverse)demand curve given by: p = a - bQ Show with calculus that the marginal revenue in fact has the same price-axis intercept but twice the slope as the inverse demand curve above.

Correct Answer
verified
Total Reve...
View Answer

Under monopsony,the wage rate

Correct Answer
verified

If a firm is able to set price,

Correct Answer
verified

The loss associated with the fact that at the profit-maximizing quantity consumers value the goods more than it cost to produce them is called

Correct Answer
verified

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

Correct Answer
verified

The government forcing a monopoly telecommunications company to allow other firms to use its cables is an attempt to

Correct Answer
verified

Suppose a monopolist has TC = 100 + 10Q + 2Q²,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Correct Answer
verified
First,determine MR = 90 - 4Q.Second,MC =...
View Answer

Correct Answer
verified
a.(p)= (120 - 2p)p - 20(120 - 2p)- 100
b...
View Answer

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Correct Answer
verified
Microsoft marketed Windows really well a...
View Answer

-The above figure shows the demand and cost curves facing a monopoly.The deadweight loss of this monopoly is

Correct Answer
verified

Exam 11: Monopoly and Monopsony

For a monopsonist,the labor supply curve is upward sloping because

Correct AnswerverifiedShow Answer

Which of the following measures are government regulations to increase competition?

Correct AnswerverifiedShow Answer

The difference between the marginal expenditure and the wage is greater when the supply curve of labor is

Correct AnswerverifiedShow Answer

The situation in which one firm can produce the total output of the market at lower cost than several firms is called

Correct AnswerverifiedShow Answer

The introduction of satellite television systems would cause the demand curve for cable television to be

Correct AnswerverifiedShow Answer

Show with a graph that an increase in the minimum wage can increase the level of employment in a monopsony market.

Correct AnswerverifiedA monopolist will select a level of empl...View AnswerShow Answer

The existence of a deadweight loss associated with a monopoly can be seen because

Correct AnswerverifiedShow Answer

A profit-maximizing monopoly will never operate in the portion of the demand curve with MR equal to

Correct AnswerverifiedShow Answer

If the inverse demand curve a monopoly faces is p = 100 - 2Q,then profit maximization

Correct AnswerverifiedShow Answer

The optimal patent length is equal to 20 years.

Correct AnswerverifiedShow Answer

Consider a monopolist facing a linear (inverse)demand curve given by: p = a - bQ Show with calculus that the marginal revenue in fact has the same price-axis intercept but twice the slope as the inverse demand curve above.

Correct AnswerverifiedTotal Reve...View AnswerShow Answer

Under monopsony,the wage rate

Correct AnswerverifiedShow Answer

If a firm is able to set price,

Correct AnswerverifiedShow Answer

The loss associated with the fact that at the profit-maximizing quantity consumers value the goods more than it cost to produce them is called

Correct AnswerverifiedShow Answer

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

Correct AnswerverifiedShow Answer

The government forcing a monopoly telecommunications company to allow other firms to use its cables is an attempt to

Correct AnswerverifiedShow Answer

Suppose a monopolist has TC = 100 + 10Q + 2Q2,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Correct AnswerverifiedFirst,determine MR = 90 - 4Q.Second,MC =...View AnswerShow Answer

Correct Answerverifieda.(p)= (120 - 2p)p - 20(120 - 2p)- 100b...View AnswerShow Answer

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Correct AnswerverifiedMicrosoft marketed Windows really well a...View AnswerShow Answer

-The above figure shows the demand and cost curves facing a monopoly.The deadweight loss of this monopoly is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
A monopolist will select a level of empl...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Total Reve...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Suppose a monopolist has TC = 100 + 10Q + 2Q²,and the demand curve it faces is p = 90 - 2Q.What will be the price,quantity,and profit for this firm?

Correct Answer
verified
First,determine MR = 90 - 4Q.Second,MC =...
View Answer

Correct Answer
verified
a.(p)= (120 - 2p)p - 20(120 - 2p)- 100
b...
View Answer

Correct Answer
verified
Microsoft marketed Windows really well a...
View Answer

Correct Answer
verified