Question 1

According to the text, a convincing argument against concentration of market power is that

Accepted Answer

A)  Market power increases incentives for innovation and invention.
B)  Market power results in lower barriers to entry.
C)  The exercise of market power results in a higher price.
D)  Large firms can produce more efficiently than small firms because of diminishing returns in production.Economies of scale may help monopolies reduce costs, but because of their market power, they will retain the cost savings rather than pass them along to the consumer in the form of lower prices.

Question 2

A monopolist that does not practice price discrimination should never produce in the

Accepted Answer

A)  Elastic portion of its demand curve because it can increase total revenue and reduce total costs by lowering the price.
B)  Inelastic portion of its demand curve because it can increase total revenue and reduce total costs by increasing the price.
C)  Inelastic portion of its demand curve because it can increase total revenue by more than it increases total cost by reducing the price.
D)  Segment of its demand curve where the price elasticity of demand is greater than 1.

Question 3

Which of the following rules is satisfied when a monopoly maximizes profits?

Accepted Answer

A)  Price = AVC.
B)  Price 
C)  MR = MC.
D)  MR > MC.

Question 4

Monopolists have an advantage over competitive markets in receiving the full benefit of research and development efforts.

Accepted Answer

A) True 
 B)False  True

Question 5

A multi-plant monopolist produces more than if each of its plants were a separate firm in a competitive market.

Accepted Answer

A) True 
 B)False

Question 6

If tourists are charged a much higher price than the natives of a country for exactly the same item, what kind of pricing is involved?

Accepted Answer

A)  Monopoly pricing.
B)  Price discrimination.
C)  Competitive pricing.
D)  MC = MR pricing.

Question 7

2 and charging P2. D)  Producing Q3 and charging P3." class="answers-bank-image d-inline" rel="preload" > Refer to Figure 24.3.Suppose this good could somehow be produced at no cost (that is, the total cost at any level of output was zero) .This single-price monopoly firm would maximize profit by

Accepted Answer

A)  Raising the price as high as possible until the quantity demanded began to decrease.
B)  Producing an infinite amount and selling at the highest price possible.
C)  Producing Q2 and charging P2.
D)   Producing Q3 and charging P3.

Question 8

In Figure 24.2, a profit-maximizing monopolist will charge a price of

Accepted Answer

A)  $6.40.
B)  $4.70.
C)  $4.00.
D)  $5.50.

Question 9

Quantity‾12345 Price ‾$500450400350300 Total cost ‾$4006509501,3001,700\begin{array}{c}\begin{array}{c}\underline{	ext {Quantity}}\1 \2 \3 \4 \5\end{array}\begin{array}{c}\underline{	ext { Price }} \\$ 500 \450 \400 \350 \300\end{array}\begin{array}{c}\underline{	ext { Total cost }} \ \$ 400 \650 \950 \1,300 \1,700\end{array} \end{array}Quantity​12345​ Price ​$500450400350300​ Total cost ​$4006509501,3001,700​​

Table 24.1	ext {Table 24.1}Table 24.1 
 Hypothetical Monopoly Costs and Revenue	ext {Hypothetical Monopoly Costs and Revenue}Hypothetical Monopoly Costs and Revenue 
 In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, total cost is

Accepted Answer

A)  $900.
B)  $1,200.
C)  $650.
D)  $950.

Question 10

Consumers may not experience the benefits of economies of scale because a natural monopoly

Accepted Answer

A)  Has higher costs with higher output.
B)  Engages in marginal cost pricing.
C)  Increases output beyond efficient levels.
D)  Charges prices higher than competitive levels.

Question 11

Google is currently being investigated by

Accepted Answer

A)  The European Antitrust Authority.
B)  The U.S.Justice Department.
C)  Intel corporation.
D)  The FTC.

Question 12

All of the following are limitations on the market power of a monopoly except

Accepted Answer

A)  The elasticity of demand.
B)  The inability of a firm to control demand.
C)  The ability of a company to control the quantity supplied.
D)  The demand curve.

Question 13

Which of the following is likely to be a monopolist?

Accepted Answer

A)  A drug firm that has a patent granting it the exclusive right to produce a drug.
B)  A large firm like GM, which has a substantial portion of the car market.
C)  The Boeing Company, which is one of the largest producers of airplanes.
D)  An Indonesian restaurant in a large city.

Question 14

Google holds market power by all of the following strategies except

Accepted Answer

A)  Purchasing rivals.
B)  Low pricing.
C)  Exclusive dealings with advertisers.
D)  Elimination of search results for competitors.

Question 15

It is possible for a monopolist to earn an economic loss.

Accepted Answer

A) True 
 B)False

Question 16

According to the In The News article "Intel's Concessions Settle Antitrust Suit," Intel Corp.agreed to

Accepted Answer

A)  Be broken up into two smaller companies.
B)  Allow price controls on its chips for two years.
C)  Stop rebates to computer makers and retailers that exclusively use Intel chips.
D)  No longer pursue patents. C

Question 17

When compared to a competitive market, monopolists tend to charge a higher price and produce a greater level of output.

Accepted Answer

A) True 
 B)False

Question 18

According to the In the News article, "U.S.Sues over Drug's Price Hike," Ovation pharmaceuticals violated federal law in 2006 when it bought a competitor's drug, creating a monopoly for the heart treatment used on premature babies, then raised the price.If a monopoly increases the price of its product, it must believe that it faces a(n)

Accepted Answer

A)  Elastic demand curve.
B)  Inelastic demand curve.
C)  Horizontal demand curve.
D)  Contestable market. B

Question 19

Which of the following is not an example of price discrimination by the only movie theater in town?

Accepted Answer

A)  Charging a lower price for children under the age of 12.
B)  Charging a lower price for matinees.
C)  Charging a lower price for people over the age of 65.
D)  Charging one price at all times for all customers.

Question 20

A monopoly

Accepted Answer

A)  Maximizes profits at the output level where P = MC.
B)  Is one of many sellers in a given market.
C)  Charges higher prices than competitive firms, ceteris paribus.
D)  Maximizes profits at the output level where P = MR.

Exam 10: Monopoly

According to the text, a convincing argument against concentration of market power is that

Correct Answer
verified

A monopolist that does not practice price discrimination should never produce in the

Correct Answer
verified

Which of the following rules is satisfied when a monopoly maximizes profits?

Correct Answer
verified

Monopolists have an advantage over competitive markets in receiving the full benefit of research and development efforts.

Correct Answer
verified
True

A multi-plant monopolist produces more than if each of its plants were a separate firm in a competitive market.

Correct Answer
verified

If tourists are charged a much higher price than the natives of a country for exactly the same item, what kind of pricing is involved?

Correct Answer
verified

Refer to Figure 24.3.Suppose this good could somehow be produced at no cost (that is, the total cost at any level of output was zero) .This single-price monopoly firm would maximize profit by

Correct Answer
verified

In Figure 24.2, a profit-maximizing monopolist will charge a price of

Correct Answer
verified

Correct Answer
verified

Consumers may not experience the benefits of economies of scale because a natural monopoly

Correct Answer
verified

Google is currently being investigated by

Correct Answer
verified

All of the following are limitations on the market power of a monopoly except

Correct Answer
verified

Which of the following is likely to be a monopolist?

Correct Answer
verified

Google holds market power by all of the following strategies except

Correct Answer
verified

It is possible for a monopolist to earn an economic loss.

Correct Answer
verified

According to the In The News article "Intel's Concessions Settle Antitrust Suit," Intel Corp.agreed to

Correct Answer
verified
C

When compared to a competitive market, monopolists tend to charge a higher price and produce a greater level of output.

Correct Answer
verified

Correct Answer
verified
B

Which of the following is not an example of price discrimination by the only movie theater in town?

Correct Answer
verified

A monopoly

Correct Answer
verified

Exam 10: Monopoly

According to the text, a convincing argument against concentration of market power is that

Correct AnswerverifiedShow Answer

A monopolist that does not practice price discrimination should never produce in the

Correct AnswerverifiedShow Answer

Which of the following rules is satisfied when a monopoly maximizes profits?

Correct AnswerverifiedShow Answer

Monopolists have an advantage over competitive markets in receiving the full benefit of research and development efforts.

Correct AnswerverifiedTrue

A multi-plant monopolist produces more than if each of its plants were a separate firm in a competitive market.

Correct AnswerverifiedShow Answer

If tourists are charged a much higher price than the natives of a country for exactly the same item, what kind of pricing is involved?

Correct AnswerverifiedShow Answer

Refer to Figure 24.3.Suppose this good could somehow be produced at no cost (that is, the total cost at any level of output was zero) .This single-price monopoly firm would maximize profit by

Correct AnswerverifiedShow Answer

In Figure 24.2, a profit-maximizing monopolist will charge a price of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Consumers may not experience the benefits of economies of scale because a natural monopoly

Correct AnswerverifiedShow Answer

Google is currently being investigated by

Correct AnswerverifiedShow Answer

All of the following are limitations on the market power of a monopoly except

Correct AnswerverifiedShow Answer

Which of the following is likely to be a monopolist?

Correct AnswerverifiedShow Answer

Google holds market power by all of the following strategies except

Correct AnswerverifiedShow Answer

It is possible for a monopolist to earn an economic loss.

Correct AnswerverifiedShow Answer

According to the In The News article "Intel's Concessions Settle Antitrust Suit," Intel Corp.agreed to

Correct AnswerverifiedC

When compared to a competitive market, monopolists tend to charge a higher price and produce a greater level of output.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Which of the following is not an example of price discrimination by the only movie theater in town?

Correct AnswerverifiedShow Answer

A monopoly

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified