Question 1

The fact that a single-price monopolist must lower its price to sell more output explains why price exceeds marginal revenue.

Accepted Answer

A) True 
 B)False

Question 2

-For the monopolist in Figure 10-19,marginal revenue from selling 4 units of output would be

Accepted Answer

A)   $20
B)   $40
C)   $80
D)   $70
E)   100F) C) and E)
G) B) and C)

Question 3

A profit-maximizing,single-price monopoly must lower its price in order to sell more output.

Accepted Answer

A) True 
 B)False

Question 4

-The firm in Figure 10-7 does not practice price discrimination.Its price and output will be

Accepted Answer

A)   $300 and 175
B)   $50 and 125
C)   $250 and 125
D)   $180 and 160
E)   none of these since the firm should immediately shut down in the short runF) A) and B)
G) A) and C)

Question 5

If technology is fixed,monopolization of a competitive industry will lead to

Accepted Answer

A)   lower prices and higher output
B)   higher prices and the same level of output
C)   lower output and the same level of price
D)   higher prices and lower output
E)   higher output and higher pricesF) D) and E)
G) All of the above

Question 6

Suppose that a non-discriminating monopolist lowers its price from $75 to $70 in order to sell more output.Marginal revenue will

Accepted Answer

A)   equal $75
B)   equal $70
C)   be between $75 and $70
D)   be less than $70
E)   be greater than $75F) All of the above
G) A) and B)

Question 7

To maximize profit,a monopolist should produce the level of output at which

Accepted Answer

A)   price equals marginal cost
B)   price equals marginal revenue and marginal cost
C)   price equals marginal revenue
D)   marginal revenue equals marginal cost
E)   price equals average total costF) All of the above
G) A) and C)

Question 8

Costly actions that a firm undertakes to gain monopoly status are called

Accepted Answer

A)   monopolization.
B)   rent-seeking activity.
C)   monopoly-profit seeking.
D)   collusion.E) None of the above
F) A) and C)

Question 9

A monopolist that does not price discriminate will set the output level where

Accepted Answer

A)   P = MC
B)   P = MR
C)   TR = TC
D)   MR = MC
E)   P = ATCF) A) and C)
G) A) and E)

Question 10

Price discrimination always harms consumers.

Accepted Answer

A) True 
 B)False

Question 11

A network externality exists

Accepted Answer

A)   in the television industry
B)   outside the television industry
C)   whenever an increase in the size of a network increases its value to current and potential members
D)   whenever an increase in the size of a network increases its average total cost of production
E)   whenever an increase in the size of a network increases its total cost of productionF) None of the above
G) C) and D)

Question 12

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

Accepted Answer

A)   Both face downward-sloping demand curves for their output.
B)   Both produce all output units for which marginal revenue exceeds marginal cost.
C)   Both produce in the range where marginal revenue is positive.
D)   Both are price setters.
E)   Both produce an output level for which price exceeds marginal cost.F) None of the above
G) All of the above

Question 13

In the long run,

Accepted Answer

A)   monopolies never earn economic profit
B)   economic profits and losses determine entry and exit into monopoly markets
C)   monopolies may earn economic profit
D)   competition always destroys monopoly
E)   government always regulates monopolyF) A) and E)
G) A) and D)

Question 14

-For the monopolist in Figure 10-19,total revenue from selling 4 units of output would be

Accepted Answer

A)   $20
B)   $300
C)   $80
D)   $70
E)   $280F) A) and B)
G) All of the above

Question 15

Economic rent is

Accepted Answer

A)   the same thing as economic profit
B)   the difference between accounting profit and economic profit
C)   the amount a firm pays to lease its factory or machinery
D)   any earnings in excess of the minimum needed for a good or service to be produced
E)   any earnings in excess of the maximum necessary for a good or service to be producedF) A) and E)
G) A) and B)

Question 16

Brittany provides manicures at the only salon in town.Her marginal cost is constant at $5 per client,her fixed cost is $25 per day,and she is able to do 8 manicures per day.On a given day,half of her clients are willing to pay $15 for a manicure;half are willing to pay only $10.If she charges $15 for those willing to pay a higher price and $10 to her other clients,then her maximum daily profit equals

Accepted Answer

A)   $55
B)   $100
C)   $60
D)   $35
E)   $75F) A) and B)
G) A) and C)

Question 17

In the short run,the monopolist should continue to produce whenever

Accepted Answer

A)   price is greater than zero
B)   price is less than average total cost
C)   price is greater than average variable cost
D)   price divided by average total cost exceeds the ratio of marginal cost to average cost at the optimal output
E)   price is less than average variable cost at the optimal outputF) A) and C)
G) B) and D)

Question 18

Money that cigarette manufacturers spend on lobbying efforts in Washington,D.C. ,is an example of

Accepted Answer

A)   economies of scale
B)   rent seeking
C)   advertising
D)   government regulations
E)   public relationsF) B) and D)
G) A) and E)

Question 19

-The non-price-discriminating firm depicted in Figure 10-8 will produce

Accepted Answer

A)   approximately 100 units of output
B)   approximately 150 units of output
C)   approximately 175 units of output
D)   more than 200 units of output
E)   nothing since it should closeF) B) and D)
G) A) and E)

Question 20

Price discrimination always benefits

Accepted Answer

A)   the owners of the price-discriminating firm
B)   the government
C)   society as a whole
D)   consumers
E)   competitorsF) A) and D)
G) A) and C)

Exam 10: Monopoly

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

Correct Answer
verified

-For the monopolist in Figure 10-19,marginal revenue from selling 4 units of output would be

Correct Answer
verified

Economic rent is

Correct Answer
verified

Price discrimination always harms consumers.

Correct Answer
verified

Costly actions that a firm undertakes to gain monopoly status are called

Correct Answer
verified

-The firm in Figure 10-7 does not practice price discrimination.Its price and output will be

Correct Answer
verified

To maximize profit,a monopolist should produce the level of output at which

Correct Answer
verified

Suppose that a non-discriminating monopolist lowers its price from $75 to $70 in order to sell more output.Marginal revenue will

Correct Answer
verified

A monopolist that does not price discriminate will set the output level where

Correct Answer
verified

If technology is fixed,monopolization of a competitive industry will lead to

Correct Answer
verified

The fact that a single-price monopolist must lower its price to sell more output explains why price exceeds marginal revenue.

Correct Answer
verified

A network externality exists

Correct Answer
verified

A profit-maximizing,single-price monopoly must lower its price in order to sell more output.

Correct Answer
verified

-The non-price-discriminating firm depicted in Figure 10-8 will produce

Correct Answer
verified

Correct Answer
verified

In the long run,

Correct Answer
verified

Money that cigarette manufacturers spend on lobbying efforts in Washington,D.C. ,is an example of

Correct Answer
verified

Price discrimination always benefits

Correct Answer
verified

-For the monopolist in Figure 10-19,total revenue from selling 4 units of output would be

Correct Answer
verified

In the short run,the monopolist should continue to produce whenever

Correct Answer
verified

Exam 10: Monopoly

All of the following statements,except one,are correct in short-run equilibrium for both a single-price monopolist and a monopolist that practices perfect price discrimination.Assume that both firms are able to earn at least a normal profit.Which statement is the exception?

Correct AnswerverifiedShow Answer

-For the monopolist in Figure 10-19,marginal revenue from selling 4 units of output would be

Correct AnswerverifiedShow Answer

Economic rent is

Correct AnswerverifiedShow Answer

Price discrimination always harms consumers.

Correct AnswerverifiedShow Answer

Costly actions that a firm undertakes to gain monopoly status are called

Correct AnswerverifiedShow Answer

-The firm in Figure 10-7 does not practice price discrimination.Its price and output will be

Correct AnswerverifiedShow Answer

To maximize profit,a monopolist should produce the level of output at which

Correct AnswerverifiedShow Answer

Suppose that a non-discriminating monopolist lowers its price from $75 to $70 in order to sell more output.Marginal revenue will

Correct AnswerverifiedShow Answer

A monopolist that does not price discriminate will set the output level where

Correct AnswerverifiedShow Answer

If technology is fixed,monopolization of a competitive industry will lead to

Correct AnswerverifiedShow Answer

The fact that a single-price monopolist must lower its price to sell more output explains why price exceeds marginal revenue.

Correct AnswerverifiedShow Answer

A network externality exists

Correct AnswerverifiedShow Answer

A profit-maximizing,single-price monopoly must lower its price in order to sell more output.

Correct AnswerverifiedShow Answer

-The non-price-discriminating firm depicted in Figure 10-8 will produce

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the long run,

Correct AnswerverifiedShow Answer

Money that cigarette manufacturers spend on lobbying efforts in Washington,D.C. ,is an example of

Correct AnswerverifiedShow Answer

Price discrimination always benefits

Correct AnswerverifiedShow Answer

-For the monopolist in Figure 10-19,total revenue from selling 4 units of output would be

Correct AnswerverifiedShow Answer

In the short run,the monopolist should continue to produce whenever

Correct AnswerverifiedShow Answer

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