Question 1

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Accepted Answer

A)   offset by regulatory revenues.
B)   called a deadweight loss.
C)   equal to the monopolist's profit.
D)   Both b and c are correct.E) A) and D)
F) All of the above

Question 2

Generic drugs enter the pharmaceutical drug market once

Accepted Answer

A)   the ingredients to the name brand drug have been discovered.
B)   10 years have passed.
C)   they are patented.
D)   the patent on the name brand drug expires.E) B) and C)
F) None of the above

Question 3

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Accepted Answer

A)   $22.
B)   $27.
C)   $54.
D)   $108.E) A) and B)
F) A) and C)

Question 4

A market structure with barriers to entry is

Accepted Answer

A)   a monopoly.
B)   oligopolistically competitive.
C)   monopolistically competitive.
D)   perfectly competitive.E) A) and C)
F) B) and D)

Question 5

When a monopolist increases the quantity that it sells, price decreases, which, all else equal, decreases total revenue; this is called the price effect.

Accepted Answer

A) True 
 B)False

Question 6

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Accepted Answer

A) True 
 B)False

Question 7

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at

Accepted Answer

A)   Q = 10.
B)   Q = 15.
C)   Q = 20.
D)   Q = 30.E) A) and B)
F) A) and C)

Question 8

The marginal revenue curve for a monopoly firm starts at the same point on the vertical axis as the i)  average revenue curve.
Ii)  marginal cost curve.
Iii)  demand curve.

Accepted Answer

A)   i)  only
B)   i)  and ii)  only
C)   i)  and iii)  only
D)   iii)  onlyE) All of the above
F) C) and D)

Question 9

Figure 15-20 
-Refer to Figure 15-20. The deadweight loss caused by a profit-maximizing monopoly amounts to

Accepted Answer

A)   $225.
B)   $450.
C)   $900.
D)   $1,350.E) A) and B)
F) A) and C)

Question 10

Consider a profit-maximizing monopoly pricing under the following conditions. The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. The socially efficient level of production is 12 units. The demand curve and marginal cost curves are linear. What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)   $4
B)   $6
C)   $12
D)   $16E) B) and C)
F) None of the above

Question 11

Table 15-20
A monopolist faces the following demand curve:
 
-Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to maximize profit?

Accepted Answer

A)   2 units
B)   3 units
C)   4 units
D)   5 unitsE) A) and B)
F) A) and C)

Question 12

Antitrust laws have economic benefits that outweigh the costs if they

Accepted Answer

A)   prevent mergers that would decrease competition and lower the costs of production.
B)   prevent mergers that would decrease competition and raise the costs of production.
C)   allow mergers that would decrease competition and raise the costs of production.
D)   None of the above is correct because antitrust laws never have economic benefits that outweigh the costs.E) All of the above
F) B) and D)

Question 13

Which of the following formulas would correctly calculate a monopolist's profit?

Accepted Answer

A)   profit = price - marginal cost
B)   profit = price - average total cost
C)   profit = price - marginal cost)  × quantity
D)   profit = price - average total cost)  × quantityE) All of the above
F) B) and C)

Question 14

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.
 
-Refer to Table 15-7. What is the total revenue from selling 8 pairs of shoes?

Accepted Answer

A)   $90
B)   $695
C)   $720
D)   $800E) None of the above
F) A) and B)

Question 15

One problem with regulating a monopolist on the basis of cost is that

Accepted Answer

A)   by focusing on costs, the regulators ignore profits.
B)   it does not provide an incentive for the monopolist to reduce its cost.
C)   a monopolist's costs, by definition, are higher than costs of perfectly competitive firms.
D)   a monopolist is still able to generate excessive economic profits.E) A) and D)
F) B) and C)

Question 16

For a profit-maximizing monopolist,

Accepted Answer

A) P > MR = MC. B) P = MR = MC. C) P > MR > MC. D) MR < MC < P.E) B) and C) F) All of the above

Question 17

Because a monopolist must lower its price in order to sell another unit of output,

Accepted Answer

A)   marginal revenue is less than price.
B)   long-term economic profits will be zero.
C)   total revenue increases as price increases.
D)   average revenue is less than price.E) B) and C)
F) All of the above

Question 18

Figure 15-24 
-Refer to Figure 15-24. Which letter represents the profit-maximizing quantity chosen by the single price monopolist?

Accepted Answer

The answer of Figure 15-24 
-Refer to Figure 15-24. Which...

Question 19

Many movie theaters allow discount tickets to be sold to senior citizens because

Accepted Answer

A)   senior-citizen laws mandate such discounts.
B)   goodwill efforts earn community respect and win loyal patrons.
C)   the theaters are profit maximizers.
D)   senior citizens lobby city councils for lower prices.E) All of the above
F) B) and C)

Question 20

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6. Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced. What would the total profit be if she charged $6 per unit for her product?

Accepted Answer

A)   $1
B)   $3
C)   $8
D)   $15E) All of the above
F) B) and C)

Exam 14: Monopoly

The marginal revenue curve for a monopoly firm starts at the same point on the vertical axis as the i) average revenue curve. Ii) marginal cost curve. Iii) demand curve.

Correct Answer
verified

A market structure with barriers to entry is

Correct Answer
verified

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the total revenue from selling 8 pairs of shoes?

Correct Answer
verified

Table 15-20 A monopolist faces the following demand curve: -Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to maximize profit?

Correct Answer
verified

Which of the following formulas would correctly calculate a monopolist's profit?

Correct Answer
verified

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Correct Answer
verified

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Correct Answer
verified

Antitrust laws have economic benefits that outweigh the costs if they

Correct Answer
verified

When a monopolist increases the quantity that it sells, price decreases, which, all else equal, decreases total revenue; this is called the price effect.

Correct Answer
verified

Because a monopolist must lower its price in order to sell another unit of output,

Correct Answer
verified

Correct Answer
verified

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at

Correct Answer
verified

Figure 15-20 -Refer to Figure 15-20. The deadweight loss caused by a profit-maximizing monopoly amounts to

Correct Answer
verified

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Correct Answer
verified

Figure 15-24 -Refer to Figure 15-24. Which letter represents the profit-maximizing quantity chosen by the single price monopolist?

Correct Answer
verified

Many movie theaters allow discount tickets to be sold to senior citizens because

Correct Answer
verified

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced. What would the total profit be if she charged $6 per unit for her product?

Correct Answer
verified

For a profit-maximizing monopolist,

Correct Answer
verified

One problem with regulating a monopolist on the basis of cost is that

Correct Answer
verified

Generic drugs enter the pharmaceutical drug market once

Correct Answer
verified

Exam 14: Monopoly

The marginal revenue curve for a monopoly firm starts at the same point on the vertical axis as the i) average revenue curve. Ii) marginal cost curve. Iii) demand curve.

Correct AnswerverifiedShow Answer

A market structure with barriers to entry is

Correct AnswerverifiedShow Answer

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the total revenue from selling 8 pairs of shoes?

Correct AnswerverifiedShow Answer

Table 15-20 A monopolist faces the following demand curve: -Refer to Table 15-20. If a monopolist faces a constant marginal cost of $5, how much output should the firm produce in order to maximize profit?

Correct AnswerverifiedShow Answer

Which of the following formulas would correctly calculate a monopolist's profit?

Correct AnswerverifiedShow Answer

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 62 units. The marginal revenue for the firm over this range is

Correct AnswerverifiedShow Answer

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Correct AnswerverifiedShow Answer

Antitrust laws have economic benefits that outweigh the costs if they

Correct AnswerverifiedShow Answer

When a monopolist increases the quantity that it sells, price decreases, which, all else equal, decreases total revenue; this is called the price effect.

Correct AnswerverifiedShow Answer

Because a monopolist must lower its price in order to sell another unit of output,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the monopolist's linear demand curve intersects the quantity axis at Q = 30, then the monopolist's marginal revenue will be equal to zero at

Correct AnswerverifiedShow Answer

Figure 15-20 -Refer to Figure 15-20. The deadweight loss caused by a profit-maximizing monopoly amounts to

Correct AnswerverifiedShow Answer

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Correct AnswerverifiedShow Answer

Figure 15-24 -Refer to Figure 15-24. Which letter represents the profit-maximizing quantity chosen by the single price monopolist?

Correct AnswerverifiedShow Answer

Many movie theaters allow discount tickets to be sold to senior citizens because

Correct AnswerverifiedShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6. Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced. What would the total profit be if she charged $6 per unit for her product?

Correct AnswerverifiedShow Answer

For a profit-maximizing monopolist,

Correct AnswerverifiedShow Answer

One problem with regulating a monopolist on the basis of cost is that

Correct AnswerverifiedShow Answer

Generic drugs enter the pharmaceutical drug market once

Correct AnswerverifiedShow Answer

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