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-Refer to the above table. Given the demand and cost schedules, what is the profit maximizing quantity for this monopolist? A) 23 B) 21 C) 20 D) 24 -Refer to the above table. Given the demand and cost schedules, what is the profit maximizing quantity for this monopolist?


A) 23
B) 21
C) 20
D) 24

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-Use the above figure. The profit-maximizing output will be A) . B) . C) . D) None of the above are correct. -Use the above figure. The profit-maximizing output will be


A) -Use the above figure. The profit-maximizing output will be A) . B) . C) . D) None of the above are correct. .
B) -Use the above figure. The profit-maximizing output will be A) . B) . C) . D) None of the above are correct. .
C) -Use the above figure. The profit-maximizing output will be A) . B) . C) . D) None of the above are correct. .
D) None of the above are correct.

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Why would economies of scale be a barrier to entry?

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If significant economies of scale exist ...

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A firm that can determine the price-output combination in order to maximize profit is known as a


A) price searcher.
B) price taker.
C) demand searcher.
D) cost taker.

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For a firm to be able to engage in price discrimination, it must


A) face a downward sloping demand curve.
B) produce more than one product.
C) have customers of different levels of wealth and age.
D) have economies of scale.

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An important difference between a perfectly competitive firm and a monopolist is


A) the size of the industry.
B) the primary objective of the firms.
C) a monopolist only produces in the long run, while a perfect competitor only produces in the short run.
D) the price it charges to sell additional units of a good.

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To maximize profits, the monopolist should produce at which


A) MR = MC.
B) MC intersects the demand curve.
C) total revenue is maximized.
D) total costs are minimized.

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Which of the following conditions is not necessary for a firm to be able to engage in price discrimination? I. The firm must be able to produce to the point at which price equals marginal revenue. II. The firm must easily be able to identify consumers with different demand elasticities. III. The firm must be able to prevent resale of the item it produces and sells.


A) I only
B) III only
C) Both I and II only
D) Both II and III only

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"Unlike a perfect competitor, a profit-maximizing monopolist produces at an output rate at which marginal revenue exceeds marginal cost." Do you agree or disagree? Why

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Disagree. To maximize profits, the monop...

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A monopolist is producing at an output level at which ATC = $5, P = $6, MC = $4, and MR = $3. We can conclude that


A) economic profit could be increased by producing more.
B) economic profit could be increased by producing less.
C) economic profit cannot be increased.
D) the firm is earning $10 in economic profits.

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When a firm experiences declining long-run average total costs as it produces more output, there are


A) increasing marginal returns to variable inputs.
B) economies of scale.
C) diseconomies of scale.
D) constant returns to scale.

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The monopolist should NEVER produce in the


A) elastic segment of its demand curve because it can increase total revenue and reduce total cost by lowering price.
B) inelastic segment of its demand curve because further lowering of the price reduces total revenue.
C) range of output for which the price elasticity of demand is infinity.
D) range of output for which there is a price elasticity exceeding one.

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Which of the following is not true about a tariff?


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.

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If a monopolist were to produce in the inelastic segment of its demand curve,


A) total revenue would be at a maximum.
B) total revenue would be at a minimum.
C) the firm would maximize profits.
D) a further drop in the price will change quantity demanded less than proportionately.

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Monopolies that price discriminate do so because


A) they are able to do so and no one else can.
B) they can increase their profits.
C) it keeps them out of trouble with the government.
D) it is more efficient.

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Which of the following is NOT a restriction the government imposes to keep potential entrants out of a market?


A) Subsidizing imported goods
B) Licensing of exclusive ownership of such a vital resources
C) Certificate of convenience
D) Compliance with government safety regulations

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-According to the above figure, the profit-maximizing price for the monopolist is A) A. B) B. C) C. D) D. -According to the above figure, the profit-maximizing price for the monopolist is


A) A.
B) B.
C) C.
D) D.

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All of the following are considered a barrier to entry into a market EXCEPT


A) government licenses.
B) persistent declining long-run average costs as output increases.
C) lowering tariffs.
D) governmental regulations of business conduct relating to workplace conditions.

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-If a monopolist is producing the quantity at which price equals marginal cost, it should A) continue to produce this amount if it wants to maximize profits. B) reduce output if it wants to maximize profits. C) reduce price and keep output unchanged if it wants to maximize profits. D) increase output if it wants to maximize profits. -If a monopolist is producing the quantity at which price equals marginal cost, it should


A) continue to produce this amount if it wants to maximize profits.
B) reduce output if it wants to maximize profits.
C) reduce price and keep output unchanged if it wants to maximize profits.
D) increase output if it wants to maximize profits.

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All of the following are true about a monopolist EXCEPT


A) the demand curve for its product is perfectly elastic.
B) it produces a product with no close substitutes.
C) its demand curve is the same as the market demand for the industry.
D) it is a single seller of a good or service.

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