FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 15: Monopoly

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 121

Multiple Choice

Review LaterAdd Note

Review Later

Scenario 15-5 An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc. -Refer to Scenario 15-5. How much profit will the airline earn if it engages in price discrimination?

A) -$5,000
B) $40,000
C) $55,000
D) $75,000

E) B) and C)
F) A) and B)

Correct Answer

verified

Show Answer

Question 122

True/False

Review LaterAdd Note

Review Later

At the profit-maximizing quantity of output for a monopolist, average revenue, marginal revenue, and price are all equal.

A) True
B) False

Correct Answer

verified

Show Answer

Question 123

Multiple Choice

Review LaterAdd Note

Which of the following is an example of a barrier to entry?

Figure 15-19 -Refer to Figure 15-19. If there are no fixed costs of production, monopoly profit without price discrimination equals

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will produce an output level of

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 profit will the concert promoters earn if they engage in price discrimination?

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

Price discrimination can increase both the monopolist's profits and society's welfare.

One problem with regulating a monopolist on the basis of cost is that

Marginal revenue for a monopolist is computed as

Suppose a monopolist is able to charge each customer a price equal to that customer's willingness­to­pay for the product. Then the monopolist is engaging in

Scenario 15-2 Consider a local, privately-owned electrical cooperative named Poweshiek Power Company (PPCo) . PPCo has just completed a clean-coal-burning electrical power plant in Iowa. Currently, PPCo can meet the electricity needs of all residents in the county. In fact, its capacity far exceeds the needs of the county. After just a few years of operation, the shareholders of PPCo experienced incredibly high rates of return on their investment due to the profitability of the corporation. -Refer to Scenario 15-2. PPCo will continue to be a monopolist in the electricity industry only if

Comparing firms in perfectly competitive markets to monopoly firms, which charges higher prices?

The deadweight loss for a monopolist equals one-half of its profits for any given level of output.

Figure 15-5 -Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of

Which of the following statements is true about patents and copyrights?

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?

Bob's Butcher Shop is the only place within 100 miles that sells bison burgers. Assuming that Bob is maximizing his profit, which of the following statements is true?

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What is the marginal cost of the 4th unit?

Table 15-1 -Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?