Question 1

Use the following to answer question: 
-(Table: Prices and Demand) The New Orleans Saints have a monopoly on Saints logo hats.The marginal cost of producing a hat is $18.If the Saints increase the number of hats they sell from 4 to 5,marginal revenue is:

Accepted Answer

A)  $20.
B)  $22.
C)  $8.
D)  $12.E) B) and C)
F) A) and B)

Question 2

In the short run,a monopoly will stop producing if:

Accepted Answer

A)  P 
B)  P 
C)  P > MR.
D)  P > ATC.E) A) and B)
F) All of the above

Question 3

Sadia wants to practice price discrimination in her bakery.Which strategy should Sadia NOT use?

Accepted Answer

A)  discounts for people who buy a large volume of bread
B)  higher prices for people who buy bread on the day it is baked and lower prices for people who place advance orders
C)  an annual fee for customers who want to shop at a discount in her store
D)  the same price for all consumers for freshly baked goodsE) All of the above
F) None of the above

Question 4

A disadvantage of public ownership of a monopoly is that publicly owned firms have relatively little incentive to keep costs low or offer high-quality products.

Accepted Answer

A) True 
 B)False

Question 5

A monopolist that charges each customer a different price based on the customer's individual willingness to pay is called a single-price monopolist.

Accepted Answer

A) True 
 B)False

Question 6

A monopoly increases price by limiting the quantity supplied to a market.

Accepted Answer

A) True 
 B)False

Question 7

A monopolist who practices price discrimination can increase sales but can never increase profits above the level that would result from a single price being set (using the intersection of marginal revenue and marginal cost).

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer question:
Figure: The Monopolist 1;P1 B) Q2;P2 C) Q3;P3 D) Q2;P4" class="answers-bank-image d-inline" rel="preload" >
-(Figure: The Monopolist) Use Figure: The Monopolist.If this market became perfectly competitive,total market production in the long run would be _____ units and the market price would be _____.

Accepted Answer

A)  Q1;P1
B)  Q2;P2
C)  Q3;P3
D)  Q2;P4E) A) and D)
F) None of the above

Question 9

Use the following to answer question:
Figure: The Monopolist 
-(Scenario: Monopolist) Use Scenario: Monopolist.The deadweight loss from this monopolist's production is: Scenario: Monopolist
The demand curve for a monopolist is P = 75 - 0.5Q,and the monopolist's marginal cost curve is defined using the equation MC = 2Q.Assume also that ATC at the profit-maximizing level of production is equal to $12.50.

Accepted Answer

A)  $31.25.
B)  $12.50.
C)  $0.00.
D)  $30.00.E) B) and D)
F) B) and C)

Question 10

Use the following to answer question:
Figure: PPV 
-(Figure: PPV) Use Figure: PPV.The figure shows the demand and marginal revenue for a pay-per-view football game on cable TV.Assume that the marginal cost and average cost are a constant $40.If the cable company practices perfect price discrimination,deadweight loss will be:

Accepted Answer

A)  $180.
B)  $100.
C)  $40.
D)  $0.E) A) and B)
F) B) and C)

Question 11

If the local phone company,a monopolist,perfectly price-discriminated,there would be a lower total surplus than if the company did not price discriminate.

Accepted Answer

A) True 
 B)False

Question 12

Use the following to answer question:
Figure: Demand,Revenue,and Cost Curves 
-(Figure: Demand,Revenue,and Cost Curves) Use Figure: Demand,Revenue,and Cost Curves.Figglenuts-R-Us is a monopolist in the figglenut market.Figglenuts-R-Us will sell _____ figglenuts and set a price of _____ to maximize profits.

Accepted Answer

A)  70;$65
B)  100;$50
C)  120;$40
D)  150;$46E) None of the above
F) B) and C)

Question 13

Use the following to answer question: 
-(Table: Demand and Total Cost) Use Table: Demand and Total Cost.Lenoia runs a natural monopoly firm producing electricity for a small mountain village.The table shows Lenoia's demand and total cost of producing electricity.The profit-maximizing quantity of electricity for her to produce is _____ megawatts.

Accepted Answer

A)  2
B)  3
C)  4
D)  5E) A) and B)
F) A) and C)

Question 14

If a monopoly market structure is transformed into a perfectly competitive one,holding all else constant,price will _____ and output will _____.

Accepted Answer

A)  fall;fall
B)  fall;increase
C)  increase;increase
D)  increase;fallE) A) and D)
F) B) and C)

Question 15

When a monopolist practices price discrimination as opposed to setting a single price,the monopolist sells less but increases profits.

Accepted Answer

A) True 
 B)False

Question 16

A monopoly responds to a decrease in marginal cost by _____ price and _____ output.

Accepted Answer

A)  increasing;decreasing
B)  increasing;increasing
C)  decreasing;increasing
D)  decreasing;decreasingE) A) and B)
F) All of the above

Question 17

Use the following to answer question:
Figure: The Monopolist 
-(Scenario: Monopolist) Use Scenario: Monopolist.The MR curve is: Scenario: Monopolist
The demand curve for a monopolist is P = 75 - 0.5Q,and the monopolist's marginal cost curve is defined using the equation MC = 2Q.Assume also that ATC at the profit-maximizing level of production is equal to $12.50.

Accepted Answer

A)  MR = 150 - 0.5Q.
B)  MR = 75 - Q.
C)  MR = 150 - Q.
D)  MR = 225 - Q.E) B) and C)
F) None of the above

Question 18

Producer surplus in monopoly is smaller than it is in the same industry operating under perfect competition.

Accepted Answer

A) True 
 B)False

Question 19

A natural monopoly has increasing returns to scale so that a large producer has a relatively low average total cost.

Accepted Answer

A) True 
 B)False

Question 20

Use the following to answer question:
Figure: PPV 
-(Figure: PPV) Use Figure: PPV.The figure shows the demand and marginal revenue for a pay-per-view football game on cable TV.Assume that the marginal cost and average cost are a constant $40.If the cable company practices perfect price discrimination,then it will sell _____ subscriptions.

Accepted Answer

A)  10
B)  8
C)  6
D)  0E) B) and D)
F) None of the above

Exam 13: Monopoly

A monopoly increases price by limiting the quantity supplied to a market.

Correct Answer
verified

Use the following to answer question: Figure: The Monopolist -(Figure: The Monopolist) Use Figure: The Monopolist.If this market became perfectly competitive,total market production in the long run would be _ units and the market price would be _.

Correct Answer
verified

If the local phone company,a monopolist,perfectly price-discriminated,there would be a lower total surplus than if the company did not price discriminate.

Correct Answer
verified

Sadia wants to practice price discrimination in her bakery.Which strategy should Sadia NOT use?

Correct Answer
verified

When a monopolist practices price discrimination as opposed to setting a single price,the monopolist sells less but increases profits.

Correct Answer
verified

A natural monopoly has increasing returns to scale so that a large producer has a relatively low average total cost.

Correct Answer
verified

Use the following to answer question: -(Table: Prices and Demand) The New Orleans Saints have a monopoly on Saints logo hats.The marginal cost of producing a hat is $18.If the Saints increase the number of hats they sell from 4 to 5,marginal revenue is:

Correct Answer
verified

Correct Answer
verified

A monopolist who practices price discrimination can increase sales but can never increase profits above the level that would result from a single price being set (using the intersection of marginal revenue and marginal cost).

Correct Answer
verified

Correct Answer
verified

A monopolist that charges each customer a different price based on the customer's individual willingness to pay is called a single-price monopolist.

Correct Answer
verified

A disadvantage of public ownership of a monopoly is that publicly owned firms have relatively little incentive to keep costs low or offer high-quality products.

Correct Answer
verified

Correct Answer
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In the short run,a monopoly will stop producing if:

Correct Answer
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Correct Answer
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If a monopoly market structure is transformed into a perfectly competitive one,holding all else constant,price will _ and output will _.

Correct Answer
verified

Producer surplus in monopoly is smaller than it is in the same industry operating under perfect competition.

Correct Answer
verified

Correct Answer
verified

A monopoly responds to a decrease in marginal cost by _ price and _ output.

Correct Answer
verified

Use the following to answer question: Figure: Demand,Revenue,and Cost Curves -(Figure: Demand,Revenue,and Cost Curves) Use Figure: Demand,Revenue,and Cost Curves.Figglenuts-R-Us is a monopolist in the figglenut market.Figglenuts-R-Us will sell _ figglenuts and set a price of _ to maximize profits.

Correct Answer
verified

Exam 13: Monopoly

A monopoly increases price by limiting the quantity supplied to a market.

Correct AnswerverifiedShow Answer

Use the following to answer question: Figure: The Monopolist -(Figure: The Monopolist) Use Figure: The Monopolist.If this market became perfectly competitive,total market production in the long run would be _____ units and the market price would be _____.

Correct AnswerverifiedShow Answer

If the local phone company,a monopolist,perfectly price-discriminated,there would be a lower total surplus than if the company did not price discriminate.

Correct AnswerverifiedShow Answer

Sadia wants to practice price discrimination in her bakery.Which strategy should Sadia NOT use?

Correct AnswerverifiedShow Answer

When a monopolist practices price discrimination as opposed to setting a single price,the monopolist sells less but increases profits.

Correct AnswerverifiedShow Answer

A natural monopoly has increasing returns to scale so that a large producer has a relatively low average total cost.

Correct AnswerverifiedShow Answer

Use the following to answer question: -(Table: Prices and Demand) The New Orleans Saints have a monopoly on Saints logo hats.The marginal cost of producing a hat is $18.If the Saints increase the number of hats they sell from 4 to 5,marginal revenue is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A monopolist who practices price discrimination can increase sales but can never increase profits above the level that would result from a single price being set (using the intersection of marginal revenue and marginal cost).

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A monopolist that charges each customer a different price based on the customer's individual willingness to pay is called a single-price monopolist.

Correct AnswerverifiedShow Answer

A disadvantage of public ownership of a monopoly is that publicly owned firms have relatively little incentive to keep costs low or offer high-quality products.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the short run,a monopoly will stop producing if:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a monopoly market structure is transformed into a perfectly competitive one,holding all else constant,price will _____ and output will _____.

Correct AnswerverifiedShow Answer

Producer surplus in monopoly is smaller than it is in the same industry operating under perfect competition.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A monopoly responds to a decrease in marginal cost by _____ price and _____ output.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Use the following to answer question: Figure: The Monopolist -(Figure: The Monopolist) Use Figure: The Monopolist.If this market became perfectly competitive,total market production in the long run would be _ units and the market price would be _.

Correct Answer
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Correct Answer
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If a monopoly market structure is transformed into a perfectly competitive one,holding all else constant,price will _ and output will _.

Correct Answer
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Correct Answer
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Correct Answer
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A monopoly responds to a decrease in marginal cost by _ price and _ output.

Correct Answer
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Correct Answer
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