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Exam 12: Pure Monopoly

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Question 41

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For a pure monopolist the relationship between total revenue and marginal revenue is such that:

A) marginal revenue is positive when total revenue is at a maximum.
B) total revenue is positive when marginal revenue is increasing,but total revenue becomes negative when marginal revenue is decreasing.
C) marginal revenue is positive when total revenue is increasing,but marginal revenue becomes negative when total revenue is decreasing.
D) marginal revenue is positive so long as total revenue is positive.

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Question 42

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If a regulatory commission imposes upon a nondiscriminating natural monopoly a price that is equal to marginal cost and below average total cost at the resulting output,then:

A) the firm will realize an economic profit.
B) the firm will earn only a normal profit.
C) allocative efficiency will be worsened.
D) the firm must be subsidized or it will go bankrupt.

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Question 43

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A monopolistic firm has a sales schedule such that it can sell 10 prefabricated garages per week at $10,000 each,but if it restricts its output to 9 per week it can sell these at $11,000 each.The marginal revenue of the tenth unit of sales per week is:

Which of the following is not a barrier to entry?

The marginal revenue curve for a monopolist:

If a nondiscriminating pure monopolist decides to sell one more unit of output,the marginal revenue associated with that unit will be:

Answer the question on the basis of the following table showing the demand schedule facing a nondiscriminating monopolist: $\begin{array}{ccc}P & & Q_{d} \\\hline\$10 & & 1 \\7&&2\\5 & & 3 \\3 & & 4 \\1 & & 5\end{array}$ Refer to the table.Assume that this monopolist faces zero production costs.The profit-maximizing monopolist will set a price of:

(Last Word) : Network effects on the Internet:

A pure monopolist is producing an output such that ATC = $4,P = $5,MC = $2,and MR = $3.This firm is realizing:

Other things equal,in which of the following cases would economic profit be the greatest?

The MR = MC rule:

At its profit-maximizing output,a pure nondiscriminating monopolist achieves:

Which of the following conditions is not required for price discrimination?

In which one of the following market models is X-inefficiency least likely to be present?

A dilemma of regulation is that:

Economic profit in the long run is:

A nondiscriminating pure monopolist finds that it can sell its 50^th unit of output for $50.We can surmise that the marginal:

When a firm is on the inelastic segment of its demand curve,it can:

An important economic problem associated with pure monopoly is that,at the profit-maximizing outputs,resources are:

Answer the question on the basis of the demand schedule shown below: $\begin{array}{l}\begin{array} { c c c } &&\text { Quantity }\\\text { Price } && \text { Demanded } \\\hline\$ 77 & & 1 \\6 & & 2 \\5 & & 3 \\4 & & 4 \\3 & & 5\end{array}\end{array}$ Refer to the data.The marginal revenue obtained from selling the third unit of output is: