Question 1

According to the theory of contestable markets, monopoly may not be a problem if

Accepted Answer

A)   The structure of a market is competitive.
B)   Antitrust regulations are enforced.
C)   Firms can exit from the market.
D)   Potential competition exists. D

Question 2

In Figure 24.2, the profit-maximizing level of output is

Accepted Answer

A)   Between 2 and 3 units.
B)   Between 4 and 5 units.
C)   4 units.
D)   Between 5 and 6 units.

Question 3

The marginal revenue of a monopolist falls below price because the firm

Accepted Answer

A)   Is not limited by market demand.
B)   Faces a market demand curve that is inelastic.
C)   Confronts a downward-sloping demand curve.
D)   Has an upward-sloping marginal cost curve.

Question 4

Which of the following would definitely not be used by any unregulated monopolist?

Accepted Answer

A)   Marginal cost pricing.
B)   The profit-maximizing rule.
C)   Price discrimination.
D)   Economies of scale.

Question 5

Reductions in minimum average costs that come about through increases in the size of plants and equipment are called

Accepted Answer

A)   Barriers to entry.
B)   Economies to monopoly power.
C)   Economies of scale.
D)   Diseconomies of entry.

Question 6

Sky-High Skywriters charges competitive prices for its skywriting services even though it has no competition.This is most likely because

Accepted Answer

A)   There are no economies of scale in this industry.
B)   It operates in a contestable market.
C)   It is a natural monopoly.
D)   It cares more about customers'well-being than its own well-being.

Question 7

Price-discriminating firms that sell in two markets will charge higher prices in the market, ceteris paribus,

Accepted Answer

A)   With a higher positive cross-price elasticity of demand with respect to substitutes.
B)   With the more price-inelastic demand.
C)   With the more income-elastic demand.
D)   With lower incomes.

Question 8

A monopolist will not use marginal cost pricing because at that output

Accepted Answer

A)   MR is greater than MC.
B)   MR is below the ATC curve.
C)   MC is greater than MR.
D)   MC is greater than the monopolist's price.

Question 9

For a monopolist, marginal revenue equals

Accepted Answer

A)   Price.
B)   Price times quantity.
C)   The change in quantity divided by the change in total revenue.
D)   The change in total revenue divided by the change in quantity.

Question 10

In Figure 24.2, total revenue at the profit-maximizing rate of output is

Accepted Answer

A)   $22.00.
B)   $6.40.
C)   $4.00.
D)   $16.00.

Question 11

Based on the headline "Russia's Sable Monopoly Persists" you could predict that

Accepted Answer

A)   Output is more than it would be in a competitive sable market.
B)   Long-run economic profit is positive in the sable market.
C)   The sable market is contestable.
D)   Sable producers are franchise monopolists. B

Question 12

A monopolist has market power because it

Accepted Answer

A)   Faces a downward-sloping demand curve for its own output.
B)   Can raise price as much as it wishes and not lose any customers.
C)   Is a price taker.
D)   Is regulated by the government.

Question 13

For a monopoly, the marginal revenue from selling an extra unit of output is less than the price of that unit.

Accepted Answer

A) True 
 B)False  True

Question 14

Which of the following is likely to be a monopolist?

Accepted Answer

A)   A drug firm that has a patent granting it the exclusive right to produce a drug.
B)   A large firm like GM, which has a substantial portion of the car market.
C)   The Boeing Company, which is one of the largest producers of airplanes.
D)   An Indonesian restaurant in a large city.

Question 15

Price discrimination allows a producer to

Accepted Answer

A)   Reap the highest possible average price for the quantity supplied.
B)   Increase the elasticity of consumer demand.
C)   Minimize marginal costs.
D)   Decrease total costs.

Question 16

The marginal revenue curve is below the demand curve

Accepted Answer

A)   If a firm must lower its price to sell additional output.
B)   For a competitive firm.
C)   When a market is characterized by economies of scale.
D)   For all firms.

Question 17

Quantity Price  Total cost 1$500$4002450650340095043501,30053001,700\begin{array}{lll}	ext { Quantity } &	ext {Price } &	ext { Total cost }\\hline1 & \$ 500 & \$ 400 \2 & 450 & 650 \3 & 400 & 950 \4 & 350 & 1,300 \5 & 300 & 1,700\end{array} Quantity 12345​Price $500450400350300​ Total cost $4006509501,3001,700​​ 
Table 24.1
Hypothetical Monopoly Costs and Revenue In Table 24.1, using the profit maximization rule, a monopolist will charge a price of

Accepted Answer

A)   $450.
B)   $400.
C)   $350.
D)   $300.

Question 18

A monopolist that does not practice price discrimination should never produce in the

Accepted Answer

A)   Elastic portion of its demand curve because it can increase total revenue and reduce total costs by lowering the price.
B)   Inelastic portion of its demand curve because it can increase total revenue and reduce total costs by increasing the price.
C)   Inelastic portion of its demand curve because it can increase total revenue by more than it increases total cost by reducing the price.
D)   Segment of its demand curve where the price elasticity of demand is greater than 1.

Question 19

Which of the following contributes to a firm maintaining a monopoly?

Accepted Answer

A)   Exclusive franchises.
B)   The existence of substitute goods.
C)   A large number of firms in the industry.
D)   Homogeneous products in the market.

Question 20

A monopolist will find that its marginal revenue curve

Accepted Answer

A)   Is the same as its demand curve.
B)   Lies above its demand curve and is flatter than its demand curve.
C)   Lies below its demand curve and is steeper than its demand curve.
D)   Lies below its demand curve and has the same slope as its demand curve.

Exam 10: Monopoly

According to the theory of contestable markets, monopoly may not be a problem if

Correct Answer
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D

In Figure 24.2, the profit-maximizing level of output is

Correct Answer
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The marginal revenue of a monopolist falls below price because the firm

Correct Answer
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Which of the following would definitely not be used by any unregulated monopolist?

Correct Answer
verified

Reductions in minimum average costs that come about through increases in the size of plants and equipment are called

Correct Answer
verified

Sky-High Skywriters charges competitive prices for its skywriting services even though it has no competition.This is most likely because

Correct Answer
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Price-discriminating firms that sell in two markets will charge higher prices in the market, ceteris paribus,

Correct Answer
verified

A monopolist will not use marginal cost pricing because at that output

Correct Answer
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For a monopolist, marginal revenue equals

Correct Answer
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In Figure 24.2, total revenue at the profit-maximizing rate of output is

Correct Answer
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Based on the headline "Russia's Sable Monopoly Persists" you could predict that

Correct Answer
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B

A monopolist has market power because it

Correct Answer
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For a monopoly, the marginal revenue from selling an extra unit of output is less than the price of that unit.

Correct Answer
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True

Which of the following is likely to be a monopolist?

Correct Answer
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Price discrimination allows a producer to

Correct Answer
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The marginal revenue curve is below the demand curve

Correct Answer
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A monopolist that does not practice price discrimination should never produce in the

Correct Answer
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Which of the following contributes to a firm maintaining a monopoly?

Correct Answer
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A monopolist will find that its marginal revenue curve

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Exam 10: Monopoly

According to the theory of contestable markets, monopoly may not be a problem if

Correct AnswerverifiedD

In Figure 24.2, the profit-maximizing level of output is

Correct AnswerverifiedShow Answer

The marginal revenue of a monopolist falls below price because the firm

Correct AnswerverifiedShow Answer

Which of the following would definitely not be used by any unregulated monopolist?

Correct AnswerverifiedShow Answer

Reductions in minimum average costs that come about through increases in the size of plants and equipment are called

Correct AnswerverifiedShow Answer

Sky-High Skywriters charges competitive prices for its skywriting services even though it has no competition.This is most likely because

Correct AnswerverifiedShow Answer

Price-discriminating firms that sell in two markets will charge higher prices in the market, ceteris paribus,

Correct AnswerverifiedShow Answer

A monopolist will not use marginal cost pricing because at that output

Correct AnswerverifiedShow Answer

For a monopolist, marginal revenue equals

Correct AnswerverifiedShow Answer

In Figure 24.2, total revenue at the profit-maximizing rate of output is

Correct AnswerverifiedShow Answer

Based on the headline "Russia's Sable Monopoly Persists" you could predict that

Correct AnswerverifiedB

A monopolist has market power because it

Correct AnswerverifiedShow Answer

For a monopoly, the marginal revenue from selling an extra unit of output is less than the price of that unit.

Correct AnswerverifiedTrue

Which of the following is likely to be a monopolist?

Correct AnswerverifiedShow Answer

Price discrimination allows a producer to

Correct AnswerverifiedShow Answer

The marginal revenue curve is below the demand curve

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A monopolist that does not practice price discrimination should never produce in the

Correct AnswerverifiedShow Answer

Which of the following contributes to a firm maintaining a monopoly?

Correct AnswerverifiedShow Answer

A monopolist will find that its marginal revenue curve

Correct AnswerverifiedShow Answer

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D

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B

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True

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