Question 1

PQ TC $1310$8$1215$30$1120$68$1025$128$930$208$835$308\begin{array} { l l r } \hline \mathbf { P } & \mathbf { Q } &	ext { TC }  \\hline \$ 13 & 10 & \$ 8 \\$ 12 & 15 & \$ 30 \\$ 11 & 20 & \$ 68 \\$ 10 & 25 & \$ 128 \\$ 9 & 30 & \$ 208 \\$ 8 & 35 & \$ 308 \\hline\end{array}P$13$12$11$10$9$8​Q101520253035​ TC $8$30$68$128$208$308​​ 
-Refer to the above table.Given the demand and cost schedules,what is the profit-maximizing price for this monopolist?

Accepted Answer

A)  $13
B)  $12
C)  $11
D)  $10

Question 2

If there are no barriers to entry into an industry,

Accepted Answer

A)  short-run economic profits must be zero.
B)  long-run economic profits must be zero.
C)  both short-run and long-run economic profits must be zero.
D)  short-run and long-run profits must still be positive.

Question 3

For a monopolist,

Accepted Answer

A)  marginal revenue is less than price.
B)  marginal revenue equals price.
C)  marginal revenue is greater than price.
D)  marginal revenue equals average revenue.

Question 4

Under a monopoly,resources are misallocated such that

Accepted Answer

A)  too few resources are used in other industries,and too many are used by the monopoly.
B)  too few resources are used by the monopoly,and too many are used elsewhere.
C)  resources are being used as efficiently as possible only by the monopoly.
D)  consumers are being forced to pay a price below the MC of the monopolist.

Question 5

Which of the following is true of a perfectly competitive firm and a monopoly in the long run?

Accepted Answer

A)  P = MC
B)  P = ATC
C)  MR = MC
D)  P = MR

Question 6

A firm can be the only firm in an industry and still not be a monopoly if

Accepted Answer

A)  the firm is not large.
B)  the firm is not making economic profits.
C)  the firm produces a good similar to a good in another industry.
D)  the firm produces a good that is not considered a necessity.

Question 7

Which of the following is NOT a precondition for price discrimination?

Accepted Answer

A)  The product cannot be resold to another customer.
B)  The price elasticities of demand are different for each group of consumers.
C)  The product is a durable good.
D)  The seller must have some market power.

Question 8

Entry barriers are most significant in

Accepted Answer

A)  pure competition.
B)  monopolistic competition.
C)  oligopoly.
D)  pure monopoly.

Question 9

A monopolist finds the price-output combination that maximizes its profits by

Accepted Answer

A)  equating total revenue and total cost.
B)  equating marginal revenue and marginal cost.
C)  finding the combination for which the difference between marginal revenue and marginal cost is the greatest.
D)  equating price and marginal cost.

Question 10

Which of the following is not true about a tariff?

Accepted Answer

A)  It is a barrier to entry in a market.
B)  It leads to a natural monopoly.
C)  It is a tax.
D)  It affects imported goods.

Question 11

Establishing different prices for similar products to reflect differences in marginal cost in providing those goods to different groups of buyers is

Accepted Answer

A)  price discrimination.
B)  cost-plus pricing.
C)  price differentiation.
D)  product differentiation.

Question 12

Which of the following is NOT necessary for price discrimination to occur?

Accepted Answer

A)  The firm must be able to separate the market into identifiable groups.
B)  The firm must be selling a durable good.
C)  The firm must have a downward sloping demand curve.
D)  The firm has to be able to prevent resale of the product or service.

Question 13

The price-output combination that maximizes profits for a monopolist occurs at the point where

Accepted Answer

A)  total revenues and total costs are equal.
B)  the difference between total revenues and total costs is the greatest.
C)  total revenues are the greatest.
D)  the elasticity of demand equals one.

Question 14

What is true of the price elasticity of demand faced by a monopoly firm?

Accepted Answer

A)  Demand is inelastic.
B)  Demand is more elastic at lower prices and more inelastic at higher prices.
C)  Demand is perfectly elastic because the monopolist has no competition.
D)  Demand becomes more elastic as the range of imperfect substitutes expands.

Question 15

A monopolist engages in price discrimination

Accepted Answer

A)  by charging a higher price to consumers whose demand is more inelastic.
B)  by charging a lower price when marginal cost is higher.
C)  by charging a lower price to consumers whose demand is more inelastic.
D)  by charging the same price to all consumers.

Question 16

If marginal cost is constant,what happens to a market if it alters from perfect competition to monopoly without any change in the position of the market demand curve or any variation in costs?

Accepted Answer

A)  Consumer surplus increases,and the previously existing deadweight loss decreases.
B)  Consumer surplus increases,and the previously existing deadweight loss increases.
C)  Consumer surplus is eliminated,and an equal-sized deadweight loss is created.
D)  Consumer surplus decreases in size,and a deadweight loss is created.

Question 17

Compared to perfectly competitive firms,the demand curve for a monopolist will be

Accepted Answer

A)  as elastic.
B)  more elastic.
C)  less elastic.
D)  perfectly elastic.

Question 18

Economies of scale can

Accepted Answer

A)  result in an increasing cost industry.
B)  cause input prices to drop.
C)  prevent the entry of new firms into a market.
D)  reduce the rate of return which the firm may earn.

Question 19

Which of the following is a TRUE statement about a monopoly?

Accepted Answer

A)  A monopoly does not necessarily earn positive economic profits.
B)  A monopoly must earn an above-normal profit to stay in business.
C)  As long as there are barriers to entry,a monopoly can always find some price-output combination that generates positive economic profits.
D)  As long as the demand curve slopes down,a monopoly can always find some price-output combination that generates positive economic profits.

Question 20

For a profit-maximizing monopolist,

Accepted Answer

A)  P > MC.
B)  P = MC.
C)  P = MR.
D)  P = ATC.

Exam 11: Monopoly

The price-output combination that maximizes profits for a monopolist occurs at the point where

Correct Answer
verified

Which of the following is a TRUE statement about a monopoly?

Correct Answer
verified

A monopolist finds the price-output combination that maximizes its profits by

Correct Answer
verified

A firm can be the only firm in an industry and still not be a monopoly if

Correct Answer
verified

Establishing different prices for similar products to reflect differences in marginal cost in providing those goods to different groups of buyers is

Correct Answer
verified

Compared to perfectly competitive firms,the demand curve for a monopolist will be

Correct Answer
verified

A monopolist engages in price discrimination

Correct Answer
verified

Entry barriers are most significant in

Correct Answer
verified

If marginal cost is constant,what happens to a market if it alters from perfect competition to monopoly without any change in the position of the market demand curve or any variation in costs?

Correct Answer
verified

For a monopolist,

Correct Answer
verified

Which of the following is not true about a tariff?

Correct Answer
verified

What is true of the price elasticity of demand faced by a monopoly firm?

Correct Answer
verified

If there are no barriers to entry into an industry,

Correct Answer
verified

Which of the following is NOT necessary for price discrimination to occur?

Correct Answer
verified

Which of the following is true of a perfectly competitive firm and a monopoly in the long run?

Correct Answer
verified

Under a monopoly,resources are misallocated such that

Correct Answer
verified

Which of the following is NOT a precondition for price discrimination?

Correct Answer
verified

For a profit-maximizing monopolist,

Correct Answer
verified

Correct Answer
verified

Economies of scale can

Correct Answer
verified

Exam 11: Monopoly

The price-output combination that maximizes profits for a monopolist occurs at the point where

Correct AnswerverifiedShow Answer

Which of the following is a TRUE statement about a monopoly?

Correct AnswerverifiedShow Answer

A monopolist finds the price-output combination that maximizes its profits by

Correct AnswerverifiedShow Answer

A firm can be the only firm in an industry and still not be a monopoly if

Correct AnswerverifiedShow Answer

Establishing different prices for similar products to reflect differences in marginal cost in providing those goods to different groups of buyers is

Correct AnswerverifiedShow Answer

Compared to perfectly competitive firms,the demand curve for a monopolist will be

Correct AnswerverifiedShow Answer

A monopolist engages in price discrimination

Correct AnswerverifiedShow Answer

Entry barriers are most significant in

Correct AnswerverifiedShow Answer

If marginal cost is constant,what happens to a market if it alters from perfect competition to monopoly without any change in the position of the market demand curve or any variation in costs?

Correct AnswerverifiedShow Answer

For a monopolist,

Correct AnswerverifiedShow Answer

Which of the following is not true about a tariff?

Correct AnswerverifiedShow Answer

What is true of the price elasticity of demand faced by a monopoly firm?

Correct AnswerverifiedShow Answer

If there are no barriers to entry into an industry,

Correct AnswerverifiedShow Answer

Which of the following is NOT necessary for price discrimination to occur?

Correct AnswerverifiedShow Answer

Which of the following is true of a perfectly competitive firm and a monopoly in the long run?

Correct AnswerverifiedShow Answer

Under a monopoly,resources are misallocated such that

Correct AnswerverifiedShow Answer

Which of the following is NOT a precondition for price discrimination?

Correct AnswerverifiedShow Answer

For a profit-maximizing monopolist,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Economies of scale can

Correct AnswerverifiedShow Answer

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