Question 1

Table 15-18
Tommy's Tie Company,a monopolist,has the following cost and revenue information.Assume that Tommy's is able to engage in perfect price discrimination.
 
-Refer to Table 15-18.If the monopolist can engage in perfect price discrimination,what is total profit at the profit-maximizing quantity?

Accepted Answer

A)   $325
B)   $435
C)   $565
D)   $1000E) A) and B)
F) All of the above

Question 2

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Accepted Answer

A) True 
 B)False

Question 3

Goods that do not have close substitutes have downward-sloping demand curves.

Accepted Answer

A) True 
 B)False

Question 4

Figure 15-6 
-Refer to Figure 15-6.A profit-maximizing monopolist would earn total revenues of

Accepted Answer

A)   $81.
B)   $144.
C)   $225.
D)   $240.E) B) and C)
F) B) and D)

Question 5

Table 15-3
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 15-3.The marginal revenue of the 2nd unit is

Accepted Answer

A)   $10.
B)   $15.
C)   $20.
D)   $25.E) A) and C)
F) B) and D)

Question 6

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 total profit at the profit-maximizing quantity?

Accepted Answer

A)   $100
B)   $245
C)   $265
D)   $395E) B) and C)
F) A) and D)

Question 7

A monopolist will choose to increase output when

Accepted Answer

A)   market price increases.
B)   at all levels of output,marginal cost increases.
C)   at the present level of output,marginal revenue exceeds marginal cost.
D)   the demand curve shifts to the left.E) A) and B)
F) A) and C)

Question 8

Figure 15-2 
-Refer to Figure 15-2.If the monopolist uses perfect price discrimination,how much profit does the firm earn?

Accepted Answer

The answer of Figure 15-2 
-Refer to Figure 15-2.If the...

Question 9

Figure 15-10 
-Refer to Figure 15-10.Which area represents the deadweight loss from monopoly?

Accepted Answer

A)   J
B)   H
C)   A+B+C+D+F+I+J+H
D)   J+HE) All of the above
F) A) and C)

Question 10

Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods.

Accepted Answer

A profit-maximizing monopolist produces ...

Question 11

A benefit of a monopoly is

Accepted Answer

A)   efficient production.
B)   decreasing long-run marginal costs.
C)   profit that can be invested in research and development.
D)   All of the above are correct.E) A) and B)
F) None of the above

Question 12

For a monopoly,the socially efficient level of output occurs where

Accepted Answer

A)   marginal revenue equals marginal cost.
B)   average revenue equals marginal cost.
C)   marginal revenue equals average total cost.
D)   average revenue equals average total cost.E) All of the above
F) B) and D)

Question 13

A perfectly competitive market

Accepted Answer

A)   may not be in the best interests of society,whereas a monopoly market promotes general economic well-being
B)   promotes general economic well-being,whereas a monopoly market may not be in the best interests of society.
C)   and a monopoly market are equally likely to promote general economic well-being.
D)   is less likely to promote general economic well-being than a monopoly market.E) B) and D)
F) None of the above

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.Sally will maximize her profits by selling

Accepted Answer

A)   3 pairs of shoes.
B)   4 pairs of shoes.
C)   6 pairs of shoes.
D)   7 pairs of shoes.E) None of the above
F) All of the above

Question 15

Figure 15-4 
-Refer to Figure 15-4.A profit-maximizing monopoly's total cost is equal to

Accepted Answer

A)   P4 x Q3.
B)   P2 x Q3.
C)   P1 x Q3.
D)   (P4-P1) x Q3.E) A) and B)
F) All of the above

Question 16

Table 15-4
A monopolist faces the following demand curve:
 
-Refer to Table 15-4.If the monopolist produces 10 units,what is its average revenue?

Accepted Answer

A)   $100
B)   $15
C)   $10
D)   $1E) All of the above
F) A) and B)

Question 17

An industry is a natural monopoly when (i) 
The government assists the firm in maintaining the monopoly.
(ii) 
A single firm owns a key resource.
(iii) 
A single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Accepted Answer

A)   (ii) only
B)   (iii) only
C)   (i) and (ii) only
D)   (ii) and (iii) onlyE) All of the above
F) None of the above

Question 18

Figure 15-7 
-Refer to Figure 15-7.What is the area of deadweight loss?

Accepted Answer

A)   the rectangle (F-
D)  xA
B)   the triangle 1/2[(F-
D)  x(B-
A)  ]
C)   the triangle 1/2[(F-G) x(B-
A)  ]
D)   the rectangle (F-
D)  xA plus the triangle 1/2[(F-
D)  x(B-
A)  ]E) C) and D)
F) B) and D)

Question 19

Figure 15-1 
-Refer to Figure 15-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm must

Accepted Answer

A)   lie entirely above the average total cost curve.
B)   lie entirely below the average total cost curve.
C)   be U-shaped.
D)   be horizontal.E) All of the above
F) A) and D)

Question 20

Which of the following is an example of public ownership of a monopoly?

Accepted Answer

A)   DeBeers
B)   Microsoft
C)   U.S.Postal Service
D)   AT&TE) A) and D)
F) B) and C)

Exam 15: Monopoly

For a monopoly,the socially efficient level of output occurs where

Correct Answer
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Which of the following is an example of public ownership of a monopoly?

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Figure 15-2 -Refer to Figure 15-2.If the monopolist uses perfect price discrimination,how much profit does the firm earn?

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Table 15-7 Sally owns the only shoe store in town.She has the following cost and revenue information. -Refer to Table 15-7.Sally will maximize her profits by selling

Correct Answer
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Figure 15-10 -Refer to Figure 15-10.Which area represents the deadweight loss from monopoly?

Correct Answer
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A monopolist will choose to increase output when

Correct Answer
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Goods that do not have close substitutes have downward-sloping demand curves.

Correct Answer
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Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3.The marginal revenue of the 2nd unit is

Correct Answer
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Figure 15-7 -Refer to Figure 15-7.What is the area of deadweight loss?

Correct Answer
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A benefit of a monopoly is

Correct Answer
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An industry is a natural monopoly when (i) The government assists the firm in maintaining the monopoly. (ii) A single firm owns a key resource. (iii) A single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Correct Answer
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Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's total cost is equal to

Correct Answer
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Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.If the monopolist produces 10 units,what is its average revenue?

Correct Answer
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Figure 15-6 -Refer to Figure 15-6.A profit-maximizing monopolist would earn total revenues of

Correct Answer
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A perfectly competitive market

Correct Answer
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Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods.

Correct Answer
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A profit-maximizing monopolist produces ...
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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 total profit at the profit-maximizing quantity?

Correct Answer
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Figure 15-1 -Refer to Figure 15-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm must

Correct Answer
verified

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Correct Answer
verified

Exam 15: Monopoly

For a monopoly,the socially efficient level of output occurs where

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Which of the following is an example of public ownership of a monopoly?

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Figure 15-2 -Refer to Figure 15-2.If the monopolist uses perfect price discrimination,how much profit does the firm earn?

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Table 15-7 Sally owns the only shoe store in town.She has the following cost and revenue information. -Refer to Table 15-7.Sally will maximize her profits by selling

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Figure 15-10 -Refer to Figure 15-10.Which area represents the deadweight loss from monopoly?

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A monopolist will choose to increase output when

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Goods that do not have close substitutes have downward-sloping demand curves.

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Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3.The marginal revenue of the 2nd unit is

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Figure 15-7 -Refer to Figure 15-7.What is the area of deadweight loss?

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A benefit of a monopoly is

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An industry is a natural monopoly when (i) The government assists the firm in maintaining the monopoly. (ii) A single firm owns a key resource. (iii) A single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.

Correct AnswerverifiedShow Answer

Figure 15-4 -Refer to Figure 15-4.A profit-maximizing monopoly's total cost is equal to

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Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.If the monopolist produces 10 units,what is its average revenue?

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Figure 15-6 -Refer to Figure 15-6.A profit-maximizing monopolist would earn total revenues of

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A perfectly competitive market

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Explain how a profit-maximizing monopolist chooses its level of output and the price of its goods.

Correct AnswerverifiedA profit-maximizing monopolist produces ...View AnswerShow 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 total profit at the profit-maximizing quantity?

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1.Considering the relationship between average total cost and marginal cost,the marginal cost curve for this firm must

Correct AnswerverifiedShow Answer

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Correct AnswerverifiedShow Answer

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A profit-maximizing monopolist produces ...
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