Question 1

If a firm can change market prices by altering its output, then it

Accepted Answer

A)  Has market power.
B)  Faces a flat demand curve.
C)  Is a price taker.
D)  Engages in marginal cost pricing.

Question 2

If the entire output of a market is produced by a single seller, the firm

Accepted Answer

A)  Is a monopoly.
B)  Faces perfectly inelastic demand.
C)  Can charge any price it wants and not lose customers.
D)  Is producing a new product.

Question 3

The World View article titled "Russia's Sable Monopoly Persists" provides evidence that Russia experienced

Accepted Answer

A)  Barriers to entry.
B)  Economies of scale.
C)  Negative economic profit.
D)  Price discrimination.

Question 4

3? A) The price elasticity is elastic. B) The price elasticity is unitary. C) The price elasticity is inelastic. D) The price elasticity is zero." class="answers-bank-image d-inline" rel="preload" > Refer to Figure 24.3.Which of the following statements is true about the price elasticity of demand at price P3?

Accepted Answer

A)  The price elasticity is elastic.
B)  The price elasticity is unitary.
C)  The price elasticity is inelastic.
D)  The price elasticity is zero.

Question 5

The World View article "Foxy Soviets Pelt the West: Sable Monopoly Traps Hard Currency, Coats Capitalists" provides evidence that the Soviets would

Accepted Answer

A)  Experience zero long-run profits in the sable market.
B)  Practice marginal cost pricing.
C)  Charge a price greater than marginal revenue.
D)  Practice price discrimination.

Question 6

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 7

The marginal revenue of a monopolist

Accepted Answer

A)  Is equal to price at all output levels.
B)  Is above a downward-sloping demand curve.
C)  Is positive up to the rate of output that maximizes total revenue.
D)  Is negative up to the rate of output that maximizes total revenue.

Question 8

In Figure 24.1, the profit-maximizing monopolist will charge a price of

Accepted Answer

A)  J.
B)  L.
C)  C.
D)  A.

Question 9

If a monopolist is producing a level of output where MR is less than MC, then it should

Accepted Answer

A)  Shift its marginal cost curve upward.
B)  Increase its output.
C)  Lower its output.
D)  Lower its price.

Question 10

The Federal Trade Commission was created to study industry structures and behavior and identify anticompetitive practices.

Accepted Answer

A) True 
 B)False

Question 11

An In the News article titled "Jury Rules Magnetek Unit Is Liable for Keeping Technology off Market" reported, "A county superior court jury in Oakland ordered a unit of Magnetek Inc.to pay $25.8 million to two California entrepreneurs ...the unit had failed to bring the pair's energy-saving fluorescent-light technology to market in a profitable manner ...in favor of an outmoded technology." The most correct implication of this quotation is that Magnetek

Accepted Answer

A)  Attempted to suppress Ramp;D.
B)  Is a highly efficient, high-tech industry.
C)  Makes zero economic profits.
D)  Charges lower prices than might be expected in a competitive market.

Question 12

Which of the following is an accurate argument in support of market power?

Accepted Answer

A)  It restricts output and raises prices, contributing to more efficient use of resources.
B)  It contributes to efficient production when there are diseconomies of scale.
C)  It provides the economic profit necessary for survival and efficient production in a market.
D)  It provides greater ability to fund research and development.

Question 13

A patent gives a firm the exclusive right to produce a product for

Accepted Answer

A)  6 months.
B)  2 years.
C)  20 years.
D)  Forever.

Question 14

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 15

A monopoly realizes larger profits than a comparable competitive market by

Accepted Answer

A)  Setting a higher price at the competitive level of output, thereby increasing total revenue.
B)  Producing a greater quantity at the competitive price, thereby increasing profits.
C)  Producing at output levels with more favorable cost structures and charging the competitive market price, thereby increasing profits per unit.
D)  Reducing production and pushing prices up.

Question 16

Quantity‾12345 Price ‾$500450400350300 Total cost ‾$4006509501,3001,700\begin{array}{c}\begin{array}{c}\underline{	ext {Quantity}}\1 \2 \3 \4 \5\end{array}\begin{array}{c}\underline{	ext { Price }} \\$ 500 \450 \400 \350 \300\end{array}\begin{array}{c}\underline{	ext { Total cost }} \ \$ 400 \650 \950 \1,300 \1,700\end{array} \end{array}Quantity​12345​ Price ​$500450400350300​ Total cost ​$4006509501,3001,700​​

Table 24.1	ext {Table 24.1}Table 24.1 
 Hypothetical Monopoly Costs and Revenue	ext {Hypothetical Monopoly Costs and Revenue}Hypothetical Monopoly Costs and Revenue 
 In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output marginal, cost is

Accepted Answer

A)  $200.
B)  $250.
C)  $300.
D)  $350.

Question 17

All of the following can be used to increase monopoly power except

Accepted Answer

A)  Acquisitions.
B)  Lawsuits.
C)  Antitrust laws.
D)  Discounts for customer loyalty.

Question 18

A monopoly

Accepted Answer

A)  Maximizes profits at the output level where MR > MC.
B)  Produces less output than a competitive industry, ceteris paribus.
C)  Charges the same price as a competitive industry, ceteris paribus.
D)  Maximizes profits at the output where P = MR.

Question 19

A monopoly is considered more desirable to society than a perfectly competitive firm because a monopoly has the incentive to pursue research and development.

Accepted Answer

A) True 
 B)False

Question 20

A monopoly can have a high degree of market power because of all but

Accepted Answer

A)  Control over key inputs.
B)  Government-bestowed franchise rights.
C)  A downward-sloping demand curve for its product.
D)  The presence of many close substitutes for its product.

Exam 10: Monopoly

The World View article titled "Russia's Sable Monopoly Persists" provides evidence that Russia experienced

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

Correct Answer
verified

A monopoly

Correct Answer
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The Federal Trade Commission was created to study industry structures and behavior and identify anticompetitive practices.

Correct Answer
verified

A monopoly realizes larger profits than a comparable competitive market by

Correct Answer
verified

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

Correct Answer
verified

A patent gives a firm the exclusive right to produce a product for

Correct Answer
verified

Which of the following is an accurate argument in support of market power?

Correct Answer
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Correct Answer
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All of the following can be used to increase monopoly power except

Correct Answer
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A monopoly is considered more desirable to society than a perfectly competitive firm because a monopoly has the incentive to pursue research and development.

Correct Answer
verified

The World View article "Foxy Soviets Pelt the West: Sable Monopoly Traps Hard Currency, Coats Capitalists" provides evidence that the Soviets would

Correct Answer
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The marginal revenue of a monopolist

Correct Answer
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A monopoly can have a high degree of market power because of all but

Correct Answer
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If the entire output of a market is produced by a single seller, the firm

Correct Answer
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If a monopolist is producing a level of output where MR is less than MC, then it should

Correct Answer
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In Figure 24.1, the profit-maximizing monopolist will charge a price of

Correct Answer
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Refer to Figure 24.3.Which of the following statements is true about the price elasticity of demand at price P₃?

Correct Answer
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If a firm can change market prices by altering its output, then it

Correct Answer
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Exam 10: Monopoly

The World View article titled "Russia's Sable Monopoly Persists" provides evidence that Russia experienced

Correct AnswerverifiedShow Answer

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

A monopoly

Correct AnswerverifiedShow Answer

The Federal Trade Commission was created to study industry structures and behavior and identify anticompetitive practices.

Correct AnswerverifiedShow Answer

A monopoly realizes larger profits than a comparable competitive market by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A patent gives a firm the exclusive right to produce a product for

Correct AnswerverifiedShow Answer

Which of the following is an accurate argument in support of market power?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following can be used to increase monopoly power except

Correct AnswerverifiedShow Answer

A monopoly is considered more desirable to society than a perfectly competitive firm because a monopoly has the incentive to pursue research and development.

Correct AnswerverifiedShow Answer

The World View article "Foxy Soviets Pelt the West: Sable Monopoly Traps Hard Currency, Coats Capitalists" provides evidence that the Soviets would

Correct AnswerverifiedShow Answer

The marginal revenue of a monopolist

Correct AnswerverifiedShow Answer

A monopoly can have a high degree of market power because of all but

Correct AnswerverifiedShow Answer

If the entire output of a market is produced by a single seller, the firm

Correct AnswerverifiedShow Answer

If a monopolist is producing a level of output where MR is less than MC, then it should

Correct AnswerverifiedShow Answer

In Figure 24.1, the profit-maximizing monopolist will charge a price of

Correct AnswerverifiedShow Answer

Refer to Figure 24.3.Which of the following statements is true about the price elasticity of demand at price P3?

Correct AnswerverifiedShow Answer

If a firm can change market prices by altering its output, then it

Correct AnswerverifiedShow Answer

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Refer to Figure 24.3.Which of the following statements is true about the price elasticity of demand at price P₃?

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