Question 1

Table 15-18
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.
 
-Refer to Table 15-18.If the monopolist can engage in perfect price discrimination,what is total profit at the profit-maximizing quantity?

Accepted Answer

A)   $325
B)   $435
C)   $565
D)   $1000E) A) and B)
F) A) and C)

Question 2

Table 15-6
A monopolist faces the following demand curve:
 
-Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the total profit if she operates at her profit-maximizing price?

Accepted Answer

A)   $1
B)   $7
C)   $9
D)   $11E) A) and C)
F) A) and D)

Question 3

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 additional profit can the airline earn by charging each customer their willingness to pay relative to charging a flat price of $600 per ticket?

Accepted Answer

A)   $15,000
B)   $25,000
C)   $40,000
D)   $70,000E) B) and C)
F) C) and D)

Question 4

Table 15-4
A monopolist faces the following demand curve:
 
-Refer to Table 15-4.In order to maximize total revenues,the monopolist should produce

Accepted Answer

A)   5 units.
B)   7.5 units.
C)   10 units.
D)   12.5 units.E) None of the above
F) C) and D)

Question 5

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Accepted Answer

A) True 
 B)False

Question 6

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information.
 
-Refer to Table 15-7.What is the marginal revenue from selling the 2nd pair of shoes?

Accepted Answer

A)   $140
B)   $150
C)   $160
D)   $170E) A) and B)
F) A) and C)

Question 7

Which of the following statements is not correct?

Accepted Answer

A)   The government may use antitrust laws to prevent a merger if the government believes the merger will reduce competition and increase prices.
B)   By regulating a natural monopoly where price equals average total cost, the monopoly earns zero profits.
C)   An advantage of private ownership over public ownership is that private business owners tend to fire inefficient managers.
D)   The government should always intervene to improve monopoly inefficiency.E) A) and B)
F) A) and C)

Question 8

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 9

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Accepted Answer

A) True 
 B)False

Question 10

Table 15-4
A monopolist faces the following demand curve:
 
-Refer to Table 15-4.If the monopolist produces 10 units,what is its marginal revenue?

Accepted Answer

A)   $12.50
B)   $5
C)   -$5
D)   -$12.50E) B) and D)
F) None of the above

Question 11

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 3rd unit?

Accepted Answer

A)   $-3
B)   $3
C)   $9
D)   $24E) A) and C)
F) None of the above

Question 12

A perfectly price-discriminating monopolist is able to

Accepted Answer

A)   maximize profit and produce a socially-optimal level of output.
B)   maximize profit, but not produce a socially-optimal level of output.
C)   produce a socially-optimal level of output, but not maximize profit.
D)   exercise illegal preferences regarding the race and/or gender of its employees.E) All of the above
F) B) and D)

Question 13

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Accepted Answer

A)   offset by regulatory revenues.
B)   called a deadweight loss.
C)   equal to the monopolist's profit.
D)   Both b and c are correct.E) B) and C)
F) A) and D)

Question 14

Table 15-13
The following table gives information on the price, quantity, and total cost of production for a monopolist.
 
-Refer to Table 15-13.How much profit will the firm earn at the profit-maximizing price?

Accepted Answer

A)   $9
B)   $12
C)   $15
D)   $18E) B) and C)
F) C) and D)

Question 15

Table 15-3
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 15-3.To maximize profit,the monopolist sets price at

Accepted Answer

A)   $10.
B)   $15.
C)   $20.
D)   $25.E) B) and D)
F) A) and C)

Question 16

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Accepted Answer

A)   resource monopolies.
B)   natural monopolies.
C)   government-created monopolies.
D)   breaking up monopolies into smaller firms.E) None of the above
F) C) and D)

Question 17

A benefit of a monopoly is

Accepted Answer

A)   lower prices.
B)   a wide variety of similar products.
C)   decreasing long-run average total costs.
D)   greater creativity by authors who can copyright their novels.E) All of the above
F) C) and D)

Question 18

Table 15-11
The following table shows quantity, price, and marginal cost information for a monopoly:
 
-Refer to Table 15-11.What would be the firm's marginal revenue at the profit-maximizing level of output?

Accepted Answer

A)   $7
B)   $6
C)   $5
D)   $1E) C) and D)
F) B) and C)

Question 19

Which of the following is a characteristic of a natural monopoly?

Accepted Answer

A)   Fixed costs are typically a small portion of total costs.
B)   Average total cost declines over large regions of output.
C)   The product sold is a natural resource such as diamonds or water.
D)   All of the above are correct.E) All of the above
F) B) and C)

Question 20

Sizable economic profits can persist over time under monopoly if the monopolist

Accepted Answer

A)   produces that output where average total cost is at a maximum.
B)   is protected by barriers to entry.
C)   operates as a price taker rather than a price maker.
D)   earns revenues that exceed variable costs.E) B) and C)
F) All of the above

Exam 15: Monopoly.

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7.What is the marginal revenue from selling the 2nd pair of shoes?

Correct Answer
verified

Correct Answer
verified

Table 15-13 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-13.How much profit will the firm earn at the profit-maximizing price?

Correct Answer
verified

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3.To maximize profit,the monopolist sets price at

Correct Answer
verified

A perfectly price-discriminating monopolist is able to

Correct Answer
verified

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

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.If the monopolist produces 10 units,what is its marginal revenue?

Correct Answer
verified

Correct Answer
verified

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the total profit if she operates at her profit-maximizing price?

Correct Answer
verified

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Correct Answer
verified

Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11.What would be the firm's marginal revenue at the profit-maximizing level of output?

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Correct Answer
verified

A benefit of a monopoly is

Correct Answer
verified

Sizable economic profits can persist over time under monopoly if the monopolist

Correct Answer
verified

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Correct Answer
verified

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.In order to maximize total revenues,the monopolist should produce

Correct Answer
verified

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Correct Answer
verified

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 3rd unit?

Correct Answer
verified

Which of the following is a characteristic of a natural monopoly?

Correct Answer
verified

Exam 15: Monopoly.

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7.What is the marginal revenue from selling the 2nd pair of shoes?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-13 The following table gives information on the price, quantity, and total cost of production for a monopolist. -Refer to Table 15-13.How much profit will the firm earn at the profit-maximizing price?

Correct AnswerverifiedShow Answer

Table 15-3 Consider the following demand and cost information for a monopoly. -Refer to Table 15-3.To maximize profit,the monopolist sets price at

Correct AnswerverifiedShow Answer

A perfectly price-discriminating monopolist is able to

Correct AnswerverifiedShow 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

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.If the monopolist produces 10 units,what is its marginal revenue?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-6 A monopolist faces the following demand curve: -Refer to Table 15-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the total profit if she operates at her profit-maximizing price?

Correct AnswerverifiedShow Answer

In order for a firm to maximize profits through price discrimination,the firm must have some market power and be able to prevent arbitrage.

Correct AnswerverifiedShow Answer

Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11.What would be the firm's marginal revenue at the profit-maximizing level of output?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Encouraging firms to invest in research and development and individuals to engage in creative endeavors such as writing novels is one justification for

Correct AnswerverifiedShow Answer

A benefit of a monopoly is

Correct AnswerverifiedShow Answer

Sizable economic profits can persist over time under monopoly if the monopolist

Correct AnswerverifiedShow Answer

Antitrust laws give the Justice Department the authority to challenge potential mergers between companies in an effort to safeguard society from monopoly power.

Correct AnswerverifiedShow Answer

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4.In order to maximize total revenues,the monopolist should produce

Correct AnswerverifiedShow Answer

The difference in total surplus between the socially efficient level of production and the monopolist's level of production is

Correct AnswerverifiedShow Answer

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 3rd unit?

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of a natural monopoly?

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