Question 1

A price discriminating monopolist will

Accepted Answer

A)  charge a lower price to those consumers who have more elastic demand.
B)  charge a higher price to those consumers who have more inelastic demand.
C)  charge more to those consumers who have more substitute goods.
D)  charge the same price to all consumers.

Question 2

An important difference between perfect competition and monopoly is

Accepted Answer

A)  a monopoly is profitable and a perfect competitor is not.
B)  the monopoly faces a downward sloping demand curve and the perfect competitor faces a horizontal demand curve.
C)  the monopoly faces an inelastic demand curve and the perfect competitor faces an elastic demand curve.
D)  a monopoly is not regulated by the market,while a perfect competitor is regulated by the market.

Question 3

How does a monopoly maximize profits? What price does it charge?

Accepted Answer

A monopoly finds the rate of output at w...

Question 4

Assume that a monopoly is producing at a profit-maximizing output level.If the firm's total fixed costs decrease,the firm

Accepted Answer

A)  should lower its price.
B)  should increase its price.
C)  should continue to produce at the same level.
D)  increase its output level.

Question 5

The portion of consumer surplus that would have existed in a perfectly competitive market but is unobtainable by anyone in society under a monopoly is known as

Accepted Answer

A)  monopoly profits.
B)  an unattainable surplus.
C)  a deadweight loss.
D)  an external cost.

Question 6

For a monopolist,the marginal revenue gained when one more unit of output is sold is

Accepted Answer

A)  the price at which the extra unit is sold minus the loss in revenue that results from cutting the price on units sold previously.
B)  equal to the price of the product.
C)  negative if price is above the midpoint of the demand curve.
D)  the average revenue created by the increased sales.

Question 7

"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

Accepted Answer

Disagree.To maximize profits,the monopol...

Question 8

-In the above figure,what is total revenue at the profit-maximizing point?

Accepted Answer

A)  $182
B)  $126
C)  $170
D)  $176

Question 9

-The profit-maximizing price and quantity of the monopolist compared to the perfectly competitive industry in the above figure are,respectively

Accepted Answer

A)  A and B.
B)  A and C.
C)  A and F.
D)  C and F.

Question 10

A monopolist's demand curve is

Accepted Answer

A)  perfectly elastic.
B)  perfectly inelastic.
C)  of unit elasticity throughout.
D)  the industry demand curve.

Question 11

Price discrimination is

Accepted Answer

A)  refusing to sell a given product to some group of customers.
B)  selling a given product at more than one price.
C)  selling a given product at more than one price,with the price differences reflecting differences in marginal cost in providing the product to different groups of customers.
D)  selling a given product at more than one price,with the price differences being unrelated to differences in cost.

Question 12

Which of the following would most likely be classified as a natural monopoly?

Accepted Answer

A)  A city water district
B)  Microsoft
C)  Disneyland
D)  Exxon-Mobil

Question 13

A monopoly misallocates resources when it

Accepted Answer

A)  restricts output so that the marginal benefit of the last unit sold exceeds the marginal social cost of producing the good.
B)  makes an above-normal profit.
C)  sells the same product to different groups of customers at different prices.
D)  exploits scale economies.

Question 14

If Japanese producers sell computer chips at a higher price in the United States than in Japan,and if there is no cost difference in producing or transporting the chips,the Japanese producers would be practicing

Accepted Answer

A)  cartel pricing.
B)  price discrimination.
C)  simple monopoly behavior.
D)  price sampling.

Question 15

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-In the above figure,the total cost of producing the profit maximizing level of output is shown by rectangle

Accepted Answer

A)  0P1AQ1.
B)  0P5EQ5.
C)  0P4HQ4.
D)  0P2BQ1.

Question 16

To sell more units,a monopolist must

Accepted Answer

A)  merely produce more units.
B)  advertise more.
C)  produce the profit maximizing rate of production.
D)  lower price.

Question 17

In principle,can a monopolist hold its monopoly power in the long run? Explain.

Accepted Answer

Yes.Monopoly power exists in the long ru...

Question 18

If a monopoly situation arises from a perfectly competitive market,the portion of producer surplus that increases in a monopoly is transferred from the perfectly competitive market's

Accepted Answer

A)  fixed cost.
B)  long-run positive economic profit.
C)  deadweight loss.
D)  consumer surplus.

Question 19

Which of the following statements is TRUE about the relationship between a firm's demand curve under perfect competition and monopoly?

Accepted Answer

A)  Under perfect competition,the demand curve is perfectly elastic; under monopoly,the demand curve has elastic,unit-elastic and inelastic portions.
B)  Under monopoly,the demand curve is perfectly elastic; under perfect competition,the demand curve has elastic,unit-elastic and inelastic portions.
C)  The demand curves for a monopoly and perfect competition are always inelastic.
D)  We can define a demand curve under perfect competition but not under monopoly.

Question 20

What is the main difference between the demand curves for the perfect competitor and the monopolist?

Accepted Answer

The perfect competitor faces a horizonta...

Exam 11: Monopoly

-The profit-maximizing price and quantity of the monopolist compared to the perfectly competitive industry in the above figure are,respectively

Correct AnswerverifiedShow Answer

If Japanese producers sell computer chips at a higher price in the United States than in Japan,and if there is no cost difference in producing or transporting the chips,the Japanese producers would be practicing

Correct AnswerverifiedShow Answer

A monopoly misallocates resources when it

Correct AnswerverifiedShow Answer

Assume that a monopoly is producing at a profit-maximizing output level.If the firm's total fixed costs decrease,the firm

Correct AnswerverifiedShow Answer

A monopolist's demand curve is

Correct AnswerverifiedShow Answer

How does a monopoly maximize profits? What price does it charge?

Correct AnswerverifiedA monopoly finds the rate of output at w...View AnswerShow Answer

Which of the following would most likely be classified as a natural monopoly?

Correct AnswerverifiedShow Answer

If a monopoly situation arises from a perfectly competitive market,the portion of producer surplus that increases in a monopoly is transferred from the perfectly competitive market's

Correct AnswerverifiedShow Answer

In principle,can a monopolist hold its monopoly power in the long run? Explain.

Correct AnswerverifiedYes.Monopoly power exists in the long ru...View AnswerShow Answer

Which of the following statements is TRUE about the relationship between a firm's demand curve under perfect competition and monopoly?

Correct AnswerverifiedShow Answer

An important difference between perfect competition and monopoly is

Correct AnswerverifiedShow Answer

A price discriminating monopolist will

Correct AnswerverifiedShow Answer

-In the above figure,the total cost of producing the profit maximizing level of output is shown by rectangle

Correct AnswerverifiedShow Answer

-In the above figure,what is total revenue at the profit-maximizing point?

Correct AnswerverifiedShow Answer

For a monopolist,the marginal revenue gained when one more unit of output is sold is

Correct AnswerverifiedShow Answer

To sell more units,a monopolist must

Correct AnswerverifiedShow Answer

The portion of consumer surplus that would have existed in a perfectly competitive market but is unobtainable by anyone in society under a monopoly is known as

Correct AnswerverifiedShow Answer

"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

Correct AnswerverifiedDisagree.To maximize profits,the monopol...View AnswerShow Answer

What is the main difference between the demand curves for the perfect competitor and the monopolist?

Correct AnswerverifiedThe perfect competitor faces a horizonta...View AnswerShow Answer

Price discrimination is

Correct AnswerverifiedShow Answer

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A monopoly finds the rate of output at w...
View Answer

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Yes.Monopoly power exists in the long ru...
View Answer

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Disagree.To maximize profits,the monopol...
View Answer

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The perfect competitor faces a horizonta...
View Answer

Correct Answer
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