Question 1

Exclusive ownership of a key resource

Accepted Answer

A)   is the most common cause of a monopoly.
B)   is a potential but rare cause of a monopoly.
C)   explains the monopoly ownership of the US Postal Service.
D)   explains why a single firm distributes water to a community.E) A) and C)
F) None of the above

Question 2

When a firm has a natural monopoly, the firm's

Accepted Answer

A)   marginal cost always exceeds its average total cost.
B)   total cost curve is horizontal.
C)   average total cost curve is downward sloping.
D)   marginal cost curve must lie above the firm's average total cost curve.E) B) and D)
F) B) and C)

Question 3

Which of the following is not a reason for the existence of a monopoly?

Accepted Answer

A)   sole ownership of a key resource
B)   patents
C)   copyrights
D)   diseconomies of scaleE) B) and C)
F) C) and D)

Question 4

Which of the following would be most likely to have monopoly power?

Accepted Answer

A)   an online bookstore
B)   a municipal water company
C)   a local restaurant
D)   a grocery storeE) None of the above
F) A) and B)

Question 5

Antitrust laws allow the government to

Accepted Answer

A)   prevent mergers.
B)   break up companies.
C)   promote competition.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

Compared to the monopoly outcome with a single price, imperfect price discrimination

Accepted Answer

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

Question 7

Patent and copyright laws are major sources of

Accepted Answer

A)   natural monopolies.
B)   government-created monopolies.
C)   resource monopolies.
D)   antitrust regulation.E) A) and D)
F) B) and D)

Question 8

Table 15-9
Consider the following demand and cost information for a monopoly. 
-Refer to Table 15-9. What price should the monopoly charge to maximize profit?

Accepted Answer

A)   $16
B)   $20
C)   $24
D)   $28E) A) and C)
F) All of the above

Question 9

Patent and copyright laws

Accepted Answer

A)   encourage creative activity.
B)   promote competition among firms.
C)   discourage creative activity.
D)   Both a and b are correct.E) B) and C)
F) A) and D)

Question 10

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost, the firm has no incentive to reduce costs.

Accepted Answer

A) True 
 B)False

Question 11

Price discrimination

Accepted Answer

A)   forces monopolies to charge a lower price as a result of government regulation.
B)   is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price.
C)   is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices.
D)   increases the consumer surplus associated with a monopolistic market.E) B) and D)
F) None of the above

Question 12

Figure 15-18 
-Refer to Figure 15-18. If the monopoly firm is not allowed to price discriminate, then consumer surplus amounts to

Accepted Answer

A)   $1,000.
B)   $2,000.
C)   $3,000.
D)   $4,000.E) None of the above
F) A) and C)

Question 13

Assume that a monopolist decides to maximize revenue rather than profit. How does this operating objective change the size of the deadweight loss? If you are a "benevolent" manager of a monopoly firm and are interested in reducing the deadweight loss of monopoly, should you maximize profits or maximize revenue? Explain your answer.

Accepted Answer

A revenue maximizer operates where MR = ...

Question 14

Table 15-1 
-Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it receive from the sale?

Accepted Answer

A)   $14
B)   $40
C)   $112
D)   $164E) B) and C)
F) None of the above

Question 15

Figure 15-3 
-Refer to Figure 15-3. Which of the following statements is correct?

Accepted Answer

A)   Panel B represents the typical demand curve for a perfectly competitive industry.
B)   Panel A represents the typical demand curve for a monopoly.
C)   Panel C represents the typical demand curve for a perfectly competitive firm.
D)   All of the above are correct.E) A) and D)
F) B) and C)

Question 16

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Accepted Answer

A)   consumer surplus
B)   deadweight loss
C)   market power
D)   arbitrageE) A) and C)
F) B) and D)

Question 17

Figure 15-24 
-Refer to Figure 15-24. Use the letters in the figure to identify the profit area for the single price monopolist.

Accepted Answer

The answer of Figure 15-24 
-Refer to Figure 15-24. Use...

Question 18

Figure 15-11 
-Refer to Figure 15-11. 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 B)

Question 19

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Accepted Answer

A)   can prevent children from buying the lower-priced tickets and selling them to adults.
B)   has some degree of monopoly pricing power.
C)   can easily distinguish between the two groups of customers.
D)   All of the above are correct.E) C) and D)
F) A) and D)

Question 20

A monopoly's marginal cost will

Accepted Answer

A)   be less than its average fixed cost.
B)   be less than the price per unit of its product.
C)   exceed its marginal revenue.
D)   equal its average total cost.E) None of the above
F) B) and C)

Exam 15: Monopoly

Which of the following is not a reason for the existence of a monopoly?

Correct Answer
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A monopoly's marginal cost will

Correct Answer
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Table 15-1 -Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it receive from the sale?

Correct Answer
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Antitrust laws allow the government to

Correct Answer
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Figure 15-18 -Refer to Figure 15-18. If the monopoly firm is not allowed to price discriminate, then consumer surplus amounts to

Correct Answer
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Price discrimination

Correct Answer
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Patent and copyright laws

Correct Answer
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Patent and copyright laws are major sources of

Correct Answer
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Which of the following would be most likely to have monopoly power?

Correct Answer
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When a firm has a natural monopoly, the firm's

Correct Answer
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A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Correct Answer
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Figure 15-3 -Refer to Figure 15-3. Which of the following statements is correct?

Correct Answer
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Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What price should the monopoly charge to maximize profit?

Correct Answer
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Which of the following can defeat the profit-maximizing strategy of price discrimination?

Correct Answer
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Figure 15-24 -Refer to Figure 15-24. Use the letters in the figure to identify the profit area for the single price monopolist.

Correct Answer
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Exclusive ownership of a key resource

Correct Answer
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Compared to the monopoly outcome with a single price, imperfect price discrimination

Correct Answer
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Figure 15-11 -Refer to Figure 15-11. Which area represents the deadweight loss from monopoly?

Correct Answer
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Correct Answer
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A revenue maximizer operates where MR = ...
View Answer

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost, the firm has no incentive to reduce costs.

Correct Answer
verified

Exam 15: Monopoly

Which of the following is not a reason for the existence of a monopoly?

Correct AnswerverifiedShow Answer

A monopoly's marginal cost will

Correct AnswerverifiedShow Answer

Table 15-1 -Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it receive from the sale?

Correct AnswerverifiedShow Answer

Antitrust laws allow the government to

Correct AnswerverifiedShow Answer

Figure 15-18 -Refer to Figure 15-18. If the monopoly firm is not allowed to price discriminate, then consumer surplus amounts to

Correct AnswerverifiedShow Answer

Price discrimination

Correct AnswerverifiedShow Answer

Patent and copyright laws

Correct AnswerverifiedShow Answer

Patent and copyright laws are major sources of

Correct AnswerverifiedShow Answer

Which of the following would be most likely to have monopoly power?

Correct AnswerverifiedShow Answer

When a firm has a natural monopoly, the firm's

Correct AnswerverifiedShow Answer

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Correct AnswerverifiedShow Answer

Figure 15-3 -Refer to Figure 15-3. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Table 15-9 Consider the following demand and cost information for a monopoly. -Refer to Table 15-9. What price should the monopoly charge to maximize profit?

Correct AnswerverifiedShow Answer

Which of the following can defeat the profit-maximizing strategy of price discrimination?

Correct AnswerverifiedShow Answer

Figure 15-24 -Refer to Figure 15-24. Use the letters in the figure to identify the profit area for the single price monopolist.

Correct AnswerverifiedShow Answer

Exclusive ownership of a key resource

Correct AnswerverifiedShow Answer

Compared to the monopoly outcome with a single price, imperfect price discrimination

Correct AnswerverifiedShow Answer

Figure 15-11 -Refer to Figure 15-11. Which area represents the deadweight loss from monopoly?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA revenue maximizer operates where MR = ...View AnswerShow Answer

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost, the firm has no incentive to reduce costs.

Correct AnswerverifiedShow Answer

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A revenue maximizer operates where MR = ...
View Answer

Correct Answer
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