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Using the diagram below compare the monopoly price and quantity (label them PM and QM, respectively) to the perfectly competitive price and quantity (label them PC and QC, respectively). Using the diagram below compare the monopoly price and quantity (label them P<sub>M</sub> and Q<sub>M</sub>, respectively) to the perfectly competitive price and quantity (label them P<sub>C</sub> and Q<sub>C</sub>, respectively).

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The diagram: blured image Note that the monopolist's...

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Assuming that average costs are the same in both circumstances, all of the following statements except one are true regarding the long-run comparison between monopoly and perfect competition. Which is the exception?


A) The monopoly price will be higher than the competitive price.
B) The monopoly quantity will be lower than the competitive quantity.
C) The monopoly produces below capacity whereas the competitive firm produces at capacity output.
D) The monopoly may be making economic profits whereas the competitive firm will not.
E) The total costs of production for the monopolist will be greater than for the competitive firm.

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Based on the graph above, the monopoly firm maximizes profit, how much is the producer surplus is how much?

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15 units of output and producer surplus ...

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-Refer to the above graph to answer this question. Suppose that the graph represents a monopolist. At what price and output would the monopolist maximize its total revenue? A) $0 and 50. B) $0 and 100. C) $10 and 50. D) $12 and 40. E) Cannot be determined. -Refer to the above graph to answer this question. Suppose that the graph represents a monopolist. At what price and output would the monopolist maximize its total revenue?


A) $0 and 50.
B) $0 and 100.
C) $10 and 50.
D) $12 and 40.
E) Cannot be determined.

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If the marginal cost of the 1000th unit produced by a monopolist is $16 and its marginal revenue is $20, what should the monopolist do?


A) Produce more until the marginal profit becomes zero.
B) Produce less since the costs will be less and therefore the profit will be greater.
C) Produce less since it will be able to sell them at a higher price and therefore obtain greater profits.
D) Produce more until the marginal revenue becomes zero.

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The following table gives the cost and demand data for a monopolist:  Output  Price ($)   Marginal  Revenue $  Average  Costs $  Marginal  Costs $ 0110010013810029590109803908086404857082705806080726755079.275770408085865308296\begin{array} { l c c c c } \text { Output } & \text { Price (\$) } & \begin{array} { c } \text { Marginal } \\\text { Revenue \$ }\end{array} & \begin{array} { c } \text { Average } \\\text { Costs \$ }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Costs \$ }\end{array} \\0 & & & & \\1 & 100 & 100 & 138 & 100 \\2 & 95 & 90 & 109& 80 \\3 & 90 & 80& 86&40 \\4 & 85 & 70 & 82 & 70 \\5 & 80 & 60 & 80 & 72 \\6 & 75 & 50 & 79.2 & 75 \\7 & 70 & 40 & 80& 85\\8&65&30&82&96\end{array} -Refer to the above information to answer this question. Suppose that the monopolist is regulated and forced to charge a socially optimum price. What will be the level of profit or loss?


A) $0.
B) Loss of $3.
C) Loss $25.2.
D) Profit of $12.
E) Profit of $60.

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All of the following except one are necessary conditions in order for price discrimination to be practiced. Which is the exception?


A) The different groups of buyers must have different elasticities of demand.
B) The seller's costs of production must be different in reference to each group of buyers.
C) The seller must be able to identify members belonging to different buying groups.
D) The seller must be able to separate members belonging to different buying groups.
E) The seller must be able to prevent the resale of the product.

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Table 10.5, which is data for a monopolist. Table 10.5, which is data for a monopolist. -Refer to Table 10.5 to answer this question. What would be the output and price if this firm was an unregulated, profit-maximizing firm? A) 4 and $52. B) 4 and $64. C) 5 and $60. D) 6 and $56. E) 9 and $44. -Refer to Table 10.5 to answer this question. What would be the output and price if this firm was an unregulated, profit-maximizing firm?


A) 4 and $52.
B) 4 and $64.
C) 5 and $60.
D) 6 and $56.
E) 9 and $44.

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How many years of protection are granted to patents newly registered in Canada?


A) 10 years.
B) 17 years.
C) 20 years.
D) 30 years.
E) 50 years.

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-Refer to the above graph to answer this question. Suppose that the graph represents a monopolist. At the profit maximizing price and output, what will be the level of total profit? A) $0. B) 6. C) $180. D) $240. E) Cannot be determined. -Refer to the above graph to answer this question. Suppose that the graph represents a monopolist. At the profit maximizing price and output, what will be the level of total profit?


A) $0.
B) 6.
C) $180.
D) $240.
E) Cannot be determined.

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The following graph gives cost and revenue data for a monopolist: The following graph gives cost and revenue data for a monopolist: -Refer to the above graph to answer this question. If the monopolist is unregulated and is maximizing its total revenue, what will be the resulting total profit or loss? A) $0. B) Loss of $600. C) Loss of $2,400. D) Profit of $640. E) Profit of $2,400. -Refer to the above graph to answer this question. If the monopolist is unregulated and is maximizing its total revenue, what will be the resulting total profit or loss?


A) $0.
B) Loss of $600.
C) Loss of $2,400.
D) Profit of $640.
E) Profit of $2,400.

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D

-Refer to the graph above. Areas C and D represent: A) the loss of surplus by consumers resulting from a monopoly. B) the cost to society of increasing output from Qm to Qc. C) consumer surplus redistributed to the monopolist. D) the loss of surplus by producers resulting from a monopoly. -Refer to the graph above. Areas C and D represent:


A) the loss of surplus by consumers resulting from a monopoly.
B) the cost to society of increasing output from Qm to Qc.
C) consumer surplus redistributed to the monopolist.
D) the loss of surplus by producers resulting from a monopoly.

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A socially optimum price is a price set equal to a firm's marginal cost.

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-Where is a monopolist's profit maximized? A) Where marginal revenue is zero. B) Where average revenue equals average cost. C) Where average revenue equals marginal cost. D) Where marginal revenue equals marginal cost. E) Where marginal profit is maximum. -Where is a monopolist's profit maximized?


A) Where marginal revenue is zero.
B) Where average revenue equals average cost.
C) Where average revenue equals marginal cost.
D) Where marginal revenue equals marginal cost.
E) Where marginal profit is maximum.

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"A monopolist can charge whatever price it wishes because it is the only firm in the market, therefore it will set the highest price it can charge." Evaluate this statement.

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The monopolist can charge whatever price...

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Under what circumstances will a profit-maximizing monopolist be forced to shut down?


A) If the average revenue exceeds the average costs of production.
B) If the average revenue exceeds the average variable costs of production.
C) If the average variable costs of production exceeds the average revenue.
D) If marginal revenue exceeds average revenue.

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-Refer to Figure 10.11 to answer this question. Suppose this graph depicts a perfectly competitive industry. What will be the equilibrium price and output respectively? A) $40 and 15. B) $40 and 30. C) $60 and 20. D) $60 and 25. E) $70 and 15. -Refer to Figure 10.11 to answer this question. Suppose this graph depicts a perfectly competitive industry. What will be the equilibrium price and output respectively?


A) $40 and 15.
B) $40 and 30.
C) $60 and 20.
D) $60 and 25.
E) $70 and 15.

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The following table shows the demand facing an unregulated monopolist:  Quantity  Price 1$702653604555506457408359301025\begin{array} { c c } \text { Quantity } & \text { Price } \\1 & \$ 70 \\2 & 65 \\3 & 60 \\4 & 55 \\5 & 50 \\6 & 45 \\7 & 40 \\8 & 35 \\9 & 30 \\10 & 25\end{array} -Refer to the above information to answer this question. At what level of output is total revenue at a maximum and what is the value of total revenue at that output?


A) 5 and $250.
B) 7 and $280.
C) 8 and $280.
D) 10 and $250.
E) 10 and $500.

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C

Suppose a monopolist can divide its market into two segments and it is able to practice price discrimination. If the two segments do not have the same price elasticity of demand, will the monopolist charge a higher or lower price in the market where the demand is relatively more inelastic?

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The monopolist will charge a higher pric...

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The table below shows the costs and demand for the Primrose Oil industry.  Quantity  Price  Total Cost 0$86$401827027890374120470160566210662272758348854440\begin{array} { c c c } \hline \text { Quantity } & \text { Price } & \text { Total Cost } \\\hline 0 & \$ 86 & \$ 40 \\1 & 82 & 70 \\2 & 78 & 90 \\3 & 74 & 120 \\4 & 70 & 160 \\5 & 66 & 210 \\6 & 62 & 272 \\7 & 58 & 348 \\8 & 54 & 440 \\\hline\end{array} a) If this were a perfectly competitive industry, what would be the price, output and total industry profit? b) If, alternately, this were a monopoly industry, what would the price, output, and total profit? Hint: Calculate [TR; MR; MC]

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a) price = $62; output = 6; profit = $100 b) price = $66; output = 5; profit = $120

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