Question 1

Patent and copyright laws encourage

Accepted Answer

A)  creative activity.
B)  lower prices due to decreasing average total costs.
C)  competition among firms.
D)  All of the above are correct.E) B) and D)
F) B) and C)

Question 2

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Accepted Answer

The defining characteristic of...

Question 3

In the market for "home heating" consumers typically have several options (e.g., electricity, heating fuel, natural gas, propane, etc.), yet we often think of firms in this industry as behaving like monopolists. Discuss the context in which your electricity provider is a monopolist. Is this characterization universally applicable? Explain your answer.

Accepted Answer

In this case, the firms are monopolists ...

Question 4

Figure 15-13 
-Refer to Figure 15-13. A profit-maximizing monopolist would create a deadweight loss to society valued at

Accepted Answer

A)  $12.
B)  $24.
C)  $42.
D)  $84.E) A) and B)
F) A) and D)

Question 5

Figure 15-6 
-Refer to Figure 15-6. What area measures the monopolist's profit?

Accepted Answer

A)  (K-
C)  *W
B)  (L-
A)  *T
C)  (K-
B)  *W
D)  0.5[(K-
C)  *(Z-T) ]E) A) and D)
F) C) and D)

Question 6

Most markets are not monopolies in the real world because

Accepted Answer

A)  firms usually face downward-sloping demand curves.
B)  supply curves slope upward.
C)  firms usually equate price with marginal cost.
D)  there are reasonable substitutes for most goods.E) All of the above
F) A) and B)

Question 7

Which of the following is an example of a barrier to entry?

Accepted Answer

A)  Tom charges a higher price than his competitors for his golf lessons.
B)  Dick charges a lower price than his competitors for his lawn-mowing services.
C)  Harry offers free concerts on Sunday afternoons as a form of advertising.
D)  Larry obtains a copyright for the new computer game that he invented.E) B) and D)
F) None of the above

Question 8

When a monopolist increases the number of units it sells, there are two effects on revenue. They are the

Accepted Answer

A)  demand effect and the supply effect.
B)  competition effect and the cost effect.
C)  competitive effect and the monopoly effect.
D)  output effect and the price effect.E) A) and D)
F) A) and C)

Question 9

Figure 15-3 
-Refer to Figure 15-3. Use the letters in the figure to identify the profit area for the single price monopolist.

Accepted Answer

The answer of Figure 15-3 
-Refer to Figure 15-3. Use...

Question 10

A benefit of a monopoly is

Accepted Answer

A)  efficient production.
B)  decreasing long-run marginal costs.
C)  profit that can be invested in research and development.
D)  All of the above are correct.E) A) and C)
F) A) and D)

Question 11

When a monopolist increases the amount of output that it produces and sells, the price of its output

Accepted Answer

A)  stays the same.
B)  increases.
C)  decreases.
D)  may increase or decrease depending on the price elasticity of demand.E) None of the above
F) B) and C)

Question 12

Figure 15-17 
-Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?

Accepted Answer

A)  ABE
B)  BCFE
C)  EFG
D)  ACGE) A) and B)
F) All of the above

Question 13

Table 15-5
A monopolist faces the following demand curve: 
-Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price?

Accepted Answer

A)  $4
B)  $39
C)  $36
D)  $42E) A) and B)
F) A) and C)

Question 14

Figure 15-2 
-Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what is the amount of profit or loss earned by the firm?

Accepted Answer

The answer of Figure 15-2 
-Refer to Figure 15-2. If...

Question 15

A fundamental source of monopoly market power arises from

Accepted Answer

A)  perfectly elastic demand.
B)  perfectly inelastic demand.
C)  barriers to entry.
D)  availability of "free" natural resources, such as water or air.E) B) and C)
F) All of the above

Question 16

Figure 15-2 
-Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Accepted Answer

The answer of Figure 15-2 
-Refer to Figure 15-2. If...

Question 17

Figure 15-2 
-Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Accepted Answer

The answer of Figure 15-2 
-Refer to Figure 15-2. If...

Question 18

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

Accepted Answer

The answer of In both perfectly competitive and monopoly markets,...

Question 19

Antitrust laws allow the government to

Accepted Answer

A)  collect revenues through the antitrust tax.
B)  break up companies.
C)  purchase privately-held companies through eminent domain.
D)  All of the above are correct.E) B) and D)
F) B) and C)

Question 20

A firm cannot price discriminate if it

Accepted Answer

A)  has perfect information about consumer demand.
B)  operates in a competitive market.
C)  faces a downward-sloping demand curve.
D)  is regulated by the government.E) None of the above
F) B) and D)

Exam 15: Monopoly

Figure 15-3 -Refer to Figure 15-3. Use the letters in the figure to identify the profit area for the single price monopolist.

Correct Answer
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Figure 15-13 -Refer to Figure 15-13. A profit-maximizing monopolist would create a deadweight loss to society valued at

Correct Answer
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Correct Answer
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In this case, the firms are monopolists ...
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Figure 15-6 -Refer to Figure 15-6. What area measures the monopolist's profit?

Correct Answer
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A benefit of a monopoly is

Correct Answer
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What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Correct Answer
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The defining characteristic of...
View Answer

A fundamental source of monopoly market power arises from

Correct Answer
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When a monopolist increases the amount of output that it produces and sells, the price of its output

Correct Answer
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Which of the following is an example of a barrier to entry?

Correct Answer
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Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price?

Correct Answer
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Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what is the amount of profit or loss earned by the firm?

Correct Answer
verified

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

Correct Answer
verified

Most markets are not monopolies in the real world because

Correct Answer
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Antitrust laws allow the government to

Correct Answer
verified

A firm cannot price discriminate if it

Correct Answer
verified

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Correct Answer
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Figure 15-17 -Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?

Correct Answer
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Patent and copyright laws encourage

Correct Answer
verified

When a monopolist increases the number of units it sells, there are two effects on revenue. They are the

Correct Answer
verified

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Correct Answer
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Exam 15: Monopoly

Figure 15-3 -Refer to Figure 15-3. Use the letters in the figure to identify the profit area for the single price monopolist.

Correct AnswerverifiedShow Answer

Figure 15-13 -Refer to Figure 15-13. A profit-maximizing monopolist would create a deadweight loss to society valued at

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn this case, the firms are monopolists ...View AnswerShow Answer

Figure 15-6 -Refer to Figure 15-6. What area measures the monopolist's profit?

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A benefit of a monopoly is

Correct AnswerverifiedShow Answer

What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.

Correct AnswerverifiedThe defining characteristic of...View AnswerShow Answer

A fundamental source of monopoly market power arises from

Correct AnswerverifiedShow Answer

When a monopolist increases the amount of output that it produces and sells, the price of its output

Correct AnswerverifiedShow Answer

Which of the following is an example of a barrier to entry?

Correct AnswerverifiedShow Answer

Table 15-5 A monopolist faces the following demand curve: -Refer to Table 15-5. The monopolist has total fixed costs of $60 and has a constant marginal cost of $15. What is the profit-maximizing price?

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what is the amount of profit or loss earned by the firm?

Correct AnswerverifiedShow Answer

In both perfectly competitive and monopoly markets, the price per unit of a good is equal to the

Correct AnswerverifiedShow Answer

Most markets are not monopolies in the real world because

Correct AnswerverifiedShow Answer

Antitrust laws allow the government to

Correct AnswerverifiedShow Answer

A firm cannot price discriminate if it

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge an average cost price, what is the amount of profit or loss earned by the firm?

Correct AnswerverifiedShow Answer

Figure 15-17 -Refer to Figure 15-17. If this firm were able to perfectly price discriminate, which of the following areas would represent the profit to this perfectly discriminating monopolist?

Correct AnswerverifiedShow Answer

Patent and copyright laws encourage

Correct AnswerverifiedShow Answer

When a monopolist increases the number of units it sells, there are two effects on revenue. They are the

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2. If a regulator requires the firm to charge a marginal cost price, what price will the firm charge?

Correct AnswerverifiedShow Answer

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In this case, the firms are monopolists ...
View Answer

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The defining characteristic of...
View Answer

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