Question 1

The profit-maximizing decision for the monopoly is:

Accepted Answer

A)   to choose the quantity where marginal cost equals marginal revenue.
B)   the same as that of the perfectly competitive firm.
C)   to choose price according to demand.
D)   All of these statements are true.E) C) and D)
F) A) and C)

Question 2

All of the following are ways a government might protect monopoly rights except:

Accepted Answer

A)   protecting intellectual property rights.
B)   subsidizing a state-owned entity.
C)   making it illegal to enter an industry.
D)   heavy taxation of potential competitors.E) B) and C)
F) A) and B)

Question 3

This graph shows the cost and revenue curves faced by a monopoly.  According to the graph shown,if Q2 units are being produced,this monopolist:

Accepted Answer

A)   is not maximizing profits.
B)   is producing where marginal costs are less than marginal revenue.
C)   is earning negative profits.
D)   should increase production.E) A) and C)
F) All of the above

Question 4

In general,with a monopolist's outcome:

Accepted Answer

A)   consumers lose surplus.
B)   monopolies earn profit.
C)   deadweight loss occurs.
D)   All of these statements are true.E) A) and C)
F) All of the above

Question 5

Total revenue decreases as output increases when demand is:

Accepted Answer

A)   downward sloping.
B)   perfectly elastic.
C)   price inelastic.
D)   price elastic.E) None of the above
F) A) and B)

Question 6

For a monopolist,marginal revenue for all units greater than 1 is:

Accepted Answer

A)   always equal to price.
B)   never less than price.
C)   always less than price.
D)   minimized at price.E) B) and D)
F) B) and C)

Question 7

One reason De Beers has lost some of its monopoly power is:

Accepted Answer

A)   antitrust laws
B)   competition from Canadian and Russian diamond mines.
C)   pressure from consumers.
D)   All of these statements are true.E) C) and D)
F) A) and D)

Question 8

If the monopolist charges a high price,he will sell:

Accepted Answer

A)   as many as he supplies to the market at that price.
B)   more than demanders want to buy at that price.
C)   less than if he were to charge a lower price.
D)   more than if he were to charge a lower price.E) All of the above
F) C) and D)

Question 9

The revenue curves that a monopoly faces are different from those that a perfectly competitive firm faces in that the:

Accepted Answer

A)   marginal revenue curve is downward sloping instead of flat.
B)   average revenue curve is no longer equal to price.
C)   marginal revenue curve is now flat instead of downward sloping.
D)   total revenue curve for a monopoly is linear.E) None of the above
F) A) and B)

Question 10

With a monopolist's outcome,consumer surplus is:

Accepted Answer

A)   higher than that of a competitive market.
B)   lower than that of a competitive market.
C)   the same as that of a competitive market.
D)   Any of these is possible.E) A) and B)
F) None of the above

Question 11

A monopoly is a firm that:

Accepted Answer

A)   is the sole producer of a good or service with no close substitutes.
B)   is the sole producer of a good or service with many close substitutes.
C)   is the producer of a good or service with just a few large competitors.
D)   produces a good or service that is identical to many others sold in the market.E) A) and C)
F) A) and B)

Question 12

This table represents the revenues faced by a monopolist. th unit is: A)  higher than that of the 3rd unit. B)  lower than that of the 3rd unit. C)  the same as that of the 3rd unit. D)  That cannot be calculated from the information given." class="answers-bank-image d-inline" rel="preload" > Using the information in the table shown,the marginal revenue for the 4th unit is:

Accepted Answer

A)   higher than that of the 3rd unit.
B)   lower than that of the 3rd unit.
C)   the same as that of the 3rd unit.
D)   That cannot be calculated from the information given.E) All of the above
F) A) and B)

Question 13

The practice of charging customers different prices for the same good is called:

Accepted Answer

A)   price discrimination.
B)   price marking.
C)   group discounting.
D)   customer discrimination.E) A) and B)
F) A) and C)

Question 14

When government owns a natural monopoly,it can:

Accepted Answer

A)   lose the incentive to be efficient.
B)   at a loss.
C)   make business decisions based on political pressures.
D)   All of these statements are true.E) B) and C)
F) A) and D)

Question 15

This graph shows the cost and revenue curves faced by a monopoly.  According the graph shown,the profit-maximizing decision of the monopolist would be:

Accepted Answer

A)   Q1, P1.
B)   Q1, P3.
C)   Q2, P2.
D)   Q1, P2.E) B) and D)
F) A) and C)

Question 16

At any quantity of output above the intersection of the marginal revenue and marginal cost curves:

Accepted Answer

A)   MR is lower than MC.
B)   profits are being maximized.
C)   ATC equal to AVC.
D)   MR is higher than MC.E) A) and D)
F) A) and C)

Question 17

Predatory pricing:

Accepted Answer

A)   is an aggressive business move to maintain market power.
B)   was used by DeBeers to maintain control over the diamond market.
C)   is when a firm intimidates others to maintain the high prices the largest firms set.
D)   All of these statements are true.E) C) and D)
F) A) and B)

Question 18

For markets operating at quantities lower than the equilibrium quantity produced in an equivalent perfectly competitive market:

Accepted Answer

A)   the outcome is efficient.
B)   total surplus is increased.
C)   consumer surplus is always increased.
D)   total surplus for society is reduced.E) A) and B)
F) All of the above

Question 19

The monopolist is always constrained by:

Accepted Answer

A)   the amount demanders are willing to buy at any given price.
B)   his production capacity.
C)   the barriers to entry.
D)   government regulation.E) A) and B)
F) A) and C)

Question 20

Perfect price discrimination:

Accepted Answer

A)   requires each customer to pay exactly his or her willingness to pay.
B)   maximizes consumer surplus.
C)   is not efficient.
D)   minimizes producer surplus.E) B) and C)
F) A) and C)

Exam 14: Monopoly

If the monopolist charges a high price,he will sell:

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For markets operating at quantities lower than the equilibrium quantity produced in an equivalent perfectly competitive market:

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Predatory pricing:

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This graph shows the cost and revenue curves faced by a monopoly. According the graph shown,the profit-maximizing decision of the monopolist would be:

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One reason De Beers has lost some of its monopoly power is:

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A monopoly is a firm that:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 4th unit is:

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Total revenue decreases as output increases when demand is:

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With a monopolist's outcome,consumer surplus is:

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Perfect price discrimination:

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The monopolist is always constrained by:

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In general,with a monopolist's outcome:

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The practice of charging customers different prices for the same good is called:

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All of the following are ways a government might protect monopoly rights except:

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At any quantity of output above the intersection of the marginal revenue and marginal cost curves:

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This graph shows the cost and revenue curves faced by a monopoly. According to the graph shown,if Q2 units are being produced,this monopolist:

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The profit-maximizing decision for the monopoly is:

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For a monopolist,marginal revenue for all units greater than 1 is:

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When government owns a natural monopoly,it can:

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The revenue curves that a monopoly faces are different from those that a perfectly competitive firm faces in that the:

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This table represents the revenues faced by a monopolist. Using the information in the table shown,the marginal revenue for the 4^th unit is:

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