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Exam 15: Monopoly

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Question 81

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Patent and copyright laws are major sources of government created monopolies.

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Question 82

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Given a monopolist is the sole producer in a market, it is able to change the price of its product: (i) without affecting the quantity sold (ii) by adjusting the quantity it supplies to the market (iii) but its profit could increase or decrease as a result

A) (ii) only is true
B) (i) and (ii) are true
C) (ii) and (iii) are true
D) (i) and (iii) are true

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Question 83

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Table 15-1 $\begin{array} { | l | l | l | l | l | } \hline \text { Qunatity } & \text { Price } & \begin{array} { l } \text { Total } \\\text { revenue }\end{array} & \begin{array} { l } \text { Average } \\\text { revenue }\end{array} & \begin{array} { l } \text { Marginal } \\\text { revenue }\end{array} \\\hline 1 & 47 & 47 & & \\\hline 2 & & 88 & 44 & 41 \\\hline 3 & 41 & & & \\\hline 4 & & & & 29 \\\hline 5 & 35 & & & 23 \\\hline 6 & & 192 & & \\\hline 7 & 29 & & & 11 \\\hline 8 & & & & 5 \\\hline 9 & & 207 & 23 & - 1 \\\hline 10 & 20 & 200 & & \\\hline\end{array}$ -Refer to Table 15-1.If the monopolist sells eight units of its product, how much revenue will it receive from the sale?

If a monopolist faces a downward-sloping market demand curve, its:

Graph 15-5 This graph depicts the demand, marginal-revenue and marginal-cost curves of a profit-maximising monopolist.Use the graph to answer the following question(s) . -Refer to Graph 15-5.Compared to the monopoly outcome, an economy designed by a social planner would have a total surplus greater by an amount equal to:

Monopolies are inefficient because at the profit maximising quantity there will still be consumers whose willingness-to-pay is higher than the product's marginal cost.

The inefficiency of a deadweight loss stems from the fact that:

Which of the following statements are true? i. in a monopoly, average revenue always equals the price of the good ii. a monopoly's profit is maximised when price equals marginal revenue iii. the marginal revenue curve will always lie below the demand curve

Suppose that Dave's Camera Shop operates in a competitive market for cameras, which of the following statements is (are) true? (i) he can maximise profit by raising his prices (ii) he can maximise profit by altering the quantity of cameras that he supplies (iii) he will be able to earn a profit only if he differentiates his cameras from the rest of the market

A monopoly firm has an upward-sloping supply curve.

Graph 15-2 This graph reflects the cost and revenue structure for a monopoly firm.Use the graph to answer the following question(s) . -Refer to Graph 15-2.The number of consumers who did not buy the good despite a willingness-to-pay greater than marginal cost is given by:

Graph 15-6 This graph depicts the demand, marginal-revenue and marginal-cost curves of a profit-maximising monopolist.Use the graph to answer the following question(s) . -Refer to Graph 15-6.What is the deadweight loss equal to when the monopolist does NOT price discriminate?

Identify the true statements about economic wellbeing from the following list.Economic wellbeing is: (i) the sum of consumer surplus and producer surplus (ii) marginal revenue to the producer minus the average cost to the consumer (iii) total profit of producers

Total economic loss due to monopoly pricing is equal to:

In which of the following situations will a firm be unable to price discriminate?

Graph 15-6 This graph depicts the demand, marginal-revenue and marginal-cost curves of a profit-maximising monopolist.Use the graph to answer the following question(s) . -Refer to Graph 15-6.If the monopoly firm perfectly price discriminates, what will the consumer surplus be?

Monopoly pricing prevents some mutually beneficial trades from taking place.These unrealised mutually beneficial trades are:

The main constraint facing the ability of a natural monopolist to price its product is:

Total economic loss due to monopoly pricing is equal to the loss to producer surplus minus the loss in consumer surplus.

A profit-maximising monopolist will choose a level of output at where: