Question 1

Which of the following is correct?

Accepted Answer

A)  Both purely competitive and monopolistic firms are "price takers."
B)  Both purely competitive and monopolistic firms are "price makers."
C)  A purely competitive firm is a "price taker," while a monopolist is a "price maker."
D)  A purely competitive firm is a "price maker," while a monopolist is a "price taker."E) All of the above
F) A) and C)

Question 2

If a pure monopolist is producing at that output where P = ATC, then

Accepted Answer

A)  its economic profits will be zero.
B)  it will be realizing losses.
C)  it will be producing less than the profit-maximizing level of output.
D)  it will be realizing an economic profit.E) C) and D)
F) A) and B)

Question 3

If a monopolist engages in price discrimination, it will

Accepted Answer

A)  realize a smaller profit.
B)  charge a higher price where individual demand is inelastic and a lower price where individual demand is elastic.
C)  produce a smaller output than when it did not discriminate.
D)  charge a competitive price to all its customers.E) None of the above
F) All of the above

Question 4

In the long-run equilibrium, a monopolist will earn zero economic profits.

Accepted Answer

A) True 
 B)False

Question 5

Suppose that a pure monopolist can sell 5 units of output at $4 per unit and 6 units at $3.90 per unit.The monopolist will produce and sell the sixth unit if its marginal cost is

Accepted Answer

A)  $4 or less.
B)  $3.90 or less.
C)  $3.50 or less.
D)  $3.40 or less.E) A) and B)
F) C) and D)

Question 6

A monopolist, being the sole seller in a market, is assured of positive economic profits.

Accepted Answer

A) True 
 B)False

Question 7

(Last Word)  "Big Data"

Accepted Answer

A)  has completely eliminated the monopoly pricing power of online retailers.
B)  is used by firms to price discriminate through personalized pricing.
C)  is a significant barrier to entry to new Internet retailers.
D)  makes it easier for government to regulate monopolistic industries.E) A) and B)
F) None of the above

Question 8

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a nondiscriminating monopolist.

Accepted Answer

A) True 
 B)False

Question 9

Total Output Price Marginal
Revenue
Average
Total Cost
Marginal
Cost
1 $100 $100 $100.00 $30
2 90 80 63.00 26
3 80 60 52.67 32
4 70 40 49.50 40
5 60 20 49.60 50
6 50 0 50.00 52
7 40 -20 52.29 66
8 30 -40 55.75 80
9 20 -60 60.67 100
10 10 -80 67.60 130
Refer to the data for a nondiscriminating monopolist.At its profit-maximizing output, this firm's total costs will be

Accepted Answer

A)  $300.
B)  $248.
C)  $198.
D)  $126.E) A) and B)
F) A) and C)

Question 10

If a pure monopolist is operating in a range of output where demand is elastic,

Accepted Answer

A)  it cannot possibly be maximizing profits.
B)  marginal revenue will be positive but declining.
C)  marginal revenue will be positive and rising.
D)  total revenue will be declining.E) All of the above
F) A) and C)

Question 11

The economic incentive for price discrimination is based upon

Accepted Answer

A)  prejudices of business managers.
B)  differences among sellers' costs.
C)  a desire to evade antitrust legislation.
D)  differences among buyers' elasticities of demand.E) A) and B)
F) All of the above

Question 12

A firm sells 99 units of output when price equals $10, and 100 units of output when price equals $9.Its marginal revenue for the 100th unit of output is negative.

Accepted Answer

A) True 
 B)False

Question 13

For a monopolist to sell an output level of 10 units, the price must be $8.MR at this output level will be

Accepted Answer

A)  > $8 and 
B)  
C)  = $8.
D)  > $16.E) C) and D)
F) B) and C)

Question 14

"Price makers" refers to firms that

Accepted Answer

A)  face a downward-sloping demand curve.
B)  are pure monopolies, rather than monopolistic competitors.
C)  have no ability to influence the market price.
D)  are pure monopolies or monopolistic competitors, but not oligopolies.E) B) and D)
F) C) and D)

Question 15

The problem with adopting a fair-return pricing policy for a natural monopoly is that

Accepted Answer

A)  economic profits will be positive.
B)  economic profits will be negative.
C)  it is not productively efficient.
D)  it is not allocatively efficient.E) A) and D)
F) A) and C)

Question 16

If marginal costs decrease and the MC curve shifts down, a typical monopolist will

Accepted Answer

A)  reduce price and reduce quantity of output.
B)  reduce price and increase quantity of output.
C)  increase price and reduce quantity of output.
D)  increase price and increase quantity of output.E) A) and D)
F) C) and D)

Question 17

Many economists agree that government should deal with monopolists on a case-by-case basis.Which of the following is not a government policy option?

Accepted Answer

A)  If the monopoly is attained and maintained through anticompetitive behavior, the government can file a suit based on antitrust laws.
B)  If the firm is a natural monopoly, the government may decide to regulate its prices and operations.
C)  If the monopoly is maximizing economic profits, the government can subsidize new firms to enter the industry.
D)  If the monopoly is subject, and vulnerable, to potential competition, the government can decide to leave it alone.E) A) and B)
F) A) and C)

Question 18

A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than

Accepted Answer

A)  average variable cost.
B)  average total cost.
C)  average fixed cost.
D)  marginal cost.E) None of the above
F) All of the above

Question 19

A monopolist sells 6 units of a product per day at a unit price of $15.If it lowers the price to $14, its total revenue increases by $22.This implies that its sales quantity increases by

Accepted Answer

A)  4 units per day.
B)  3 units per day.
C)  2 units per day.
D)  1 unit per day.E) None of the above
F) A) and D)

Question 20

If profits are maximized (or losses minimized) , which of the following conditions is common to both unregulated monopoly and pure competition?

Accepted Answer

A)  MC = P
B)  MC = ATC
C)  MR = MC
D)  P = MRE) None of the above
F) A) and C)

Exam 12: Pure Monopoly

If a monopolist engages in price discrimination, it will

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

For a monopolist to sell an output level of 10 units, the price must be $8.MR at this output level will be

Correct Answer
verified

(Last Word) "Big Data"

Correct Answer
verified

If a pure monopolist is operating in a range of output where demand is elastic,

Correct Answer
verified

Correct Answer
verified

"Price makers" refers to firms that

Correct Answer
verified

If a pure monopolist is producing at that output where P = ATC, then

Correct Answer
verified

A monopolist, being the sole seller in a market, is assured of positive economic profits.

Correct Answer
verified

The problem with adopting a fair-return pricing policy for a natural monopoly is that

Correct Answer
verified

The economic incentive for price discrimination is based upon

Correct Answer
verified

Suppose that a pure monopolist can sell 5 units of output at $4 per unit and 6 units at $3.90 per unit.The monopolist will produce and sell the sixth unit if its marginal cost is

Correct Answer
verified

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a nondiscriminating monopolist.

Correct Answer
verified

Many economists agree that government should deal with monopolists on a case-by-case basis.Which of the following is not a government policy option?

Correct Answer
verified

A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than

Correct Answer
verified

If marginal costs decrease and the MC curve shifts down, a typical monopolist will

Correct Answer
verified

A monopolist sells 6 units of a product per day at a unit price of $15.If it lowers the price to $14, its total revenue increases by $22.This implies that its sales quantity increases by

Correct Answer
verified

If profits are maximized (or losses minimized) , which of the following conditions is common to both unregulated monopoly and pure competition?

Correct Answer
verified

A firm sells 99 units of output when price equals $10, and 100 units of output when price equals $9.Its marginal revenue for the 100th unit of output is negative.

Correct Answer
verified

In the long-run equilibrium, a monopolist will earn zero economic profits.

Correct Answer
verified

Exam 12: Pure Monopoly

If a monopolist engages in price discrimination, it will

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

For a monopolist to sell an output level of 10 units, the price must be $8.MR at this output level will be

Correct AnswerverifiedShow Answer

(Last Word) "Big Data"

Correct AnswerverifiedShow Answer

If a pure monopolist is operating in a range of output where demand is elastic,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

"Price makers" refers to firms that

Correct AnswerverifiedShow Answer

If a pure monopolist is producing at that output where P = ATC, then

Correct AnswerverifiedShow Answer

A monopolist, being the sole seller in a market, is assured of positive economic profits.

Correct AnswerverifiedShow Answer

The problem with adopting a fair-return pricing policy for a natural monopoly is that

Correct AnswerverifiedShow Answer

The economic incentive for price discrimination is based upon

Correct AnswerverifiedShow Answer

Suppose that a pure monopolist can sell 5 units of output at $4 per unit and 6 units at $3.90 per unit.The monopolist will produce and sell the sixth unit if its marginal cost is

Correct AnswerverifiedShow Answer

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a nondiscriminating monopolist.

Correct AnswerverifiedShow Answer

Many economists agree that government should deal with monopolists on a case-by-case basis.Which of the following is not a government policy option?

Correct AnswerverifiedShow Answer

A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than

Correct AnswerverifiedShow Answer

If marginal costs decrease and the MC curve shifts down, a typical monopolist will

Correct AnswerverifiedShow Answer

A monopolist sells 6 units of a product per day at a unit price of $15.If it lowers the price to $14, its total revenue increases by $22.This implies that its sales quantity increases by

Correct AnswerverifiedShow Answer

If profits are maximized (or losses minimized) , which of the following conditions is common to both unregulated monopoly and pure competition?

Correct AnswerverifiedShow Answer

A firm sells 99 units of output when price equals $10, and 100 units of output when price equals $9.Its marginal revenue for the 100th unit of output is negative.

Correct AnswerverifiedShow Answer

In the long-run equilibrium, a monopolist will earn zero economic profits.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified