Question 1

Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

Accepted Answer

A)   Airlines are practicing imperfect price discrimination to raise their profits.
B)   Airlines charge a different rate based on the different nature of peoples' travel needs.
C)   Airlines are attempting to charge people based on their willingness to pay.
D)   All of the above are correct.E) A) and C)
F) None of the above

Question 2

A firm cannot price discriminate if it

Accepted Answer

A)   has perfect information about consumer demand.
B)   operates in a competitive market.
C)   faces a downward-sloping demand curve.
D)   is regulated by the government.E) B) and C)
F) A) and C)

Question 3

For a monopolist,

Accepted Answer

A)   average revenue is always greater than the price of the good.
B)   marginal revenue is always less than the price of the good.
C)   marginal cost is always greater than average total cost.
D)   marginal revenue equals marginal cost at the point where total revenue is maximized.E) B) and D)
F) A) and D)

Question 4

Perfect price discrimination describes a situation in which the monopolist

Accepted Answer

A)   knows the exact willingness to pay of each of its customers.
B)   charges exactly two different prices to exactly two different groups of customers.
C)   maximizes consumer surplus.
D)   experiences a zero economic profit.E) All of the above
F) None of the above

Question 5

The three main sources of barriers to entry are monopoly resources,government regulation,and the firm's production process.

Accepted Answer

A) True 
 B)False

Question 6

A firm cannot price discriminate if

Accepted Answer

A)   its has declining marginal revenue.
B)   it operates in a competitive market.
C)   buyers only reveal the price they are willing to pay for the product.
D)   it has a constant marginal cost.E) A) and B)
F) A) and C)

Question 7

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Accepted Answer

A)   quantity is lower than the socially-optimal quantity.
B)   price equals marginal revenue.
C)   price is the same as average revenue.
D)   earns positive profits.E) None of the above
F) A) and D)

Question 8

Scenario 15-6
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual fans. For a particular WeR2Loud concert, there are 1,000 die-hard fans who will pay $150 for a ticket and 500 casual fans who will pay $50 for a ticket. There are 1,500 seats available at the concert venue. Suppose the cost of putting on the concert is $50,000, which includes the cost of the band, lighting, security, etc.
-Refer to Scenario 15-6.How much additional profit can the concert promoters earn by charging each customer their willingness to pay relative to charging a flat price of $150 per ticket?

Accepted Answer

A)   $25,000
B)   $50,000
C)   $75,000
D)   $100,000E) A) and B)
F) B) and D)

Question 9

Table 15-17
 
-Refer to Table 15-17.If a monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Accepted Answer

A)   3 units
B)   4 units
C)   5 units
D)   6 unitsE) B) and D)
F) A) and B)

Question 10

Figure 15-16
 
-Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Accepted Answer

A)   $1.
B)   $1,562.5.
C)   $3,125.
D)   $6,250.E) C) and D)
F) B) and D)

Question 11

In a monopoly market,the socially efficient quantity of output is typically higher than the profit-maximizing quantity of output for the monopolist.

Accepted Answer

A) True 
 B)False

Question 12

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Accepted Answer

A) True 
 B)False

Question 13

For a long while,electricity producers were thought to be a classic example of a natural monopoly.People held this view because

Accepted Answer

A)   the average cost of producing units of electricity by one producer in a specific region was lower than if the same quantity were produced by two or more producers in the same region.
B)   the average cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more produced in the same region.
C)   the marginal cost of producing units of electricity by one producer in a specific region was higher than if the same quantity were produced by two or more producers in the same region.
D)   electricity is a special non-excludable good that could never be sold in a competitive market.E) C) and D)
F) A) and B)

Question 14

The economic inefficiency of a monopolist can be measured by the

Accepted Answer

A)   number of consumers who are unable to purchase the product because of its high price.
B)   excess profit generated by monopoly firms.
C)   poor quality of service offered by monopoly firms.
D)   deadweight loss.E) B) and C)
F) None of the above

Question 15

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6.What is the marginal revenue from the sale of the 2nd unit?

Accepted Answer

A)   $-3
B)   $3
C)   $9
D)   $24E) B) and C)
F) C) and D)

Question 16

Figure 15-16
 
-Refer to Figure 15-16.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Accepted Answer

A)   $0.
B)   $1,562.50.
C)   $3,125.
D)   $6,250.E) A) and B)
F) B) and C)

Question 17

Consider a profit-maximizing monopoly pricing under the following conditions.The profit-maximizing price charged for goods produced is $12.The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6.The socially efficient level of production is 12 units.The demand curve and marginal cost curves are linear.What is the value of the deadweight loss created by the monopolist?

Accepted Answer

A)   $4
B)   $6
C)   $12
D)   $16E) B) and C)
F) B) and D)

Question 18

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Accepted Answer

A) True 
 B)False

Question 19

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly.
 
-Refer to Table 15-8.What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Accepted Answer

A)   The firm saves $15.
B)   $15
C)   $30
D)   $40E) A) and C)
F) None of the above

Question 20

Figure 15-2

-Refer to Figure 15-2.Which of the following statements is correct?

Accepted Answer

A)   Panel C represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly.
B)   Panel B represents the typical demand curve for a perfectly competitive firm, and Panel C represents the typical demand curve for a monopoly.
C)   Panel A represents the typical demand curve for a perfectly competitive firm, and Panel B represents the typical demand curve for a monopoly.
D)   Panel C represents the typical demand curve for a perfectly competitive firm, and Panel D represents the typical demand curve for a monopoly.E) A) and D)
F) A) and C)

Exam 15: Monopoly.

A firm cannot price discriminate if it

Correct Answer
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Correct Answer
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Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.What is the marginal revenue from the sale of the 2nd unit?

Correct Answer
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In a monopoly market,the socially efficient quantity of output is typically higher than the profit-maximizing quantity of output for the monopolist.

Correct Answer
verified

Perfect price discrimination describes a situation in which the monopolist

Correct Answer
verified

For a long while,electricity producers were thought to be a classic example of a natural monopoly.People held this view because

Correct Answer
verified

Figure 15-16 -Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Correct Answer
verified

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Correct Answer
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A firm cannot price discriminate if

Correct Answer
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Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

Correct Answer
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For a monopolist,

Correct Answer
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Correct Answer
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The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

Correct Answer
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The economic inefficiency of a monopolist can be measured by the

Correct Answer
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Figure 15-16 -Refer to Figure 15-16.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Correct Answer
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Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8.What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Correct Answer
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The three main sources of barriers to entry are monopoly resources,government regulation,and the firm's production process.

Correct Answer
verified

Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Correct Answer
verified

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $5,how much output should the firm produce?

Correct Answer
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Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

Correct Answer
verified

Exam 15: Monopoly.

A firm cannot price discriminate if it

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.What is the marginal revenue from the sale of the 2nd unit?

Correct AnswerverifiedShow Answer

In a monopoly market,the socially efficient quantity of output is typically higher than the profit-maximizing quantity of output for the monopolist.

Correct AnswerverifiedShow Answer

Perfect price discrimination describes a situation in which the monopolist

Correct AnswerverifiedShow Answer

For a long while,electricity producers were thought to be a classic example of a natural monopoly.People held this view because

Correct AnswerverifiedShow Answer

Figure 15-16 -Refer to Figure 15-16.If there are no fixed costs of production,monopoly profit with perfect price discrimination equals

Correct AnswerverifiedShow Answer

One characteristic of a monopoly market is that the product is virtually identical to products produced by competing firms.

Correct AnswerverifiedShow Answer

A firm cannot price discriminate if

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2.Which of the following statements is correct?

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For a monopolist,

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Correct AnswerverifiedShow Answer

The deadweight loss that arises from a monopoly is a consequence of the fact that the monopoly

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The economic inefficiency of a monopolist can be measured by the

Correct AnswerverifiedShow Answer

Figure 15-16 -Refer to Figure 15-16.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

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Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8.What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Correct AnswerverifiedShow Answer

The three main sources of barriers to entry are monopoly resources,government regulation,and the firm's production process.

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Government intervention is always preferable to doing nothing when reducing the social inefficiencies of monopoly.

Correct AnswerverifiedShow Answer

Table 15-17 -Refer to Table 15-17.If a monopolist faces a constant marginal cost of $5,how much output should the firm produce?

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Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back.What is the reason for this price discrepancy?

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