Question 1

Which of the following is not an example of a barrier to entry?

Accepted Answer

A)   Mighty Mitch's Mining Company owns a unique plot of land in Tanzania,under which lies the only large deposit of Tanzanite in the world.
B)   A pharmaceutical company obtains a patent for a specific high blood pressure medication.
C)   A musician obtains a copyright for her original song.
D)   An entrepreneur opens a popular new restaurant.E) A) and B)
F) A) and C)

Question 2

Figure 15-14 
-Refer to Figure 15-14.To maximize its profit,a monopolist would choose which of the following outcomes?

Accepted Answer

A)   Q = 30 and P = 30
B)   Q = 30 and P = 60
C)   Q = 45 and P = 45
D)   Q = 60 and P = 30E) A) and B)
F) None of the above

Question 3

Which of the following statements comparing monopoly with competition is correct?

Accepted Answer

A)   A monopolist produces a higher level of output and charges a lower price than a competitive firm would.
B)   With perfect price discrimination,the total surplus under monopoly can be the same as under competition.
C)   With or without price discrimination,the consumer surplus under monopoly is at least as large as it would be under competition.
D)   The deadweight loss associated with monopoly is caused by the positive economic profits of the monopolist;competitive firms do not earn a positive economic profit so there is no deadweight loss under competition.E) All of the above
F) A) and B)

Question 4

Suppose that a professional photographer takes a prize-winning digital photo.She can sell a 5"x7" color print of the photo for $10.She can also sell the digital file for $20.There are 500 people willing to buy the color print and 2,000 people willing to buy the digital file.Assume the costs to the photographer are zero and that the people who purchase the digital file cannot resell the file itself or any prints made from it.What should she do in order to maximize her profits?

Accepted Answer

A)   earn $5,000 by selling only the color prints
B)   earn $40,000 by selling only the digital files
C)   earn $45,000 by selling both the color prints and the digital files at their respective prices
D)   We do not have enough information with which to answer this question.E) A) and C)
F) B) and C)

Question 5

Most firms have

Accepted Answer

A)   no monopoly pricing power.
B)   some monopoly pricing power.
C)   absolute monopoly pricing power.
D)   the ability to earn monopoly profits.E) A) and C)
F) A) and D)

Question 6

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 2nd unit?

Accepted Answer

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

Question 7

Figure 15-2    
-Refer to Figure 15-2.Which panel could represent the demand curve facing the soybean industry?

Accepted Answer

A)   Panel A
B)   Panel B
C)   Panel C
D)   Panel DE) B) and D)
F) B) and C)

Question 8

Monopoly firms have

Accepted Answer

A)   downward-sloping demand curves,and they can sell as much output as they desire at the market price.
B)   downward-sloping demand curves,and they can sell only a limited quantity of output at each price.
C)   horizontal demand curves,and they can sell as much output as they desire at the market price.
D)   horizontal demand curves,and they can sell only a limited quantity of output at each price.E) B) and C)
F) C) and D)

Question 9

Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

Accepted Answer

A) True 
 B)False

Question 10

Figure 15-1 
-Refer to Scenario 15-1.Which of the following statements is most likely to be true? 
(i) New entrants to the market know they will have a smaller market share than C.R.Evans currently has.
(ii) C.R.Evans is most likely experiencing increasing average total cost.
(iii) C.R.Evans is a natural monopoly.

Accepted Answer

A)   (i) and (ii) only
B)   (ii) and (iii) only
C)   (i) and (iii) only
D)   (i) , (ii) ,and (iii) E) All of the above
F) None of the above

Question 11

Figure 15-3 
-Refer to Figure 15-3.If the monopoly firm is currently producing Q3 units of output,then a decrease in output will necessarily cause profit to

Accepted Answer

A)   remain unchanged.
B)   decrease.
C)   increase as long as the new level of output is at least Q2.
D)   increase as long as the new level of output is at least Q1.E) A) and C)
F) A) and B)

Question 12

The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?

Accepted Answer

A)   marginal cost and demand
B)   marginal cost and marginal revenue
C)   average total cost and marginal revenue
D)   average variable cost and average revenueE) None of the above
F) All of the above

Question 13

Figure 15-3 
-Refer to Figure 15-3.The average total cost curve for a monopoly firm is depicted by curve

Accepted Answer

A)   A.
B)   B.
C)   C.
D)   D.E) None of the above
F) C) and D)

Question 14

A monopolist earns higher profits by charging one price than by practicing price discrimination.

Accepted Answer

A) True 
 B)False

Question 15

Price discrimination is prohibited by antitrust laws.

Accepted Answer

A) True 
 B)False

Question 16

Suppose ABC Aluminum Inc.owns 80% of the world's bauxite,a mineral used in the production of aluminum.Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Accepted Answer

A)   monopoly resources
B)   government regulation
C)   the production process
D)   Both a and b are correct.E) None of the above
F) A) and C)

Question 17

Figure 15-1 
-Refer to Figure 15-1.If a regulator requires the firm to charge a marginal cost price,what price will the firm charge?

Accepted Answer

The answer of Figure 15-1 
-Refer to Figure 15-1.If a...

Question 18

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 19

Figure 15-2 
-Refer to Figure 15-2.If the monopolist uses perfect price discrimination,how much output does the firm produce?

Accepted Answer

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

Question 20

Figure 15-5 
-Refer to Figure 15-5.What price will the monopolist charge?

Accepted Answer

A)   A
B)   B
C)   C
D)   FE) A) and B)
F) None of the above

Exam 15: Monopoly

A monopolist earns higher profits by charging one price than by practicing price discrimination.

Correct Answer
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Price discrimination is prohibited by antitrust laws.

Correct Answer
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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 2nd unit?

Correct Answer
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Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

Correct Answer
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Correct Answer
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Most firms have

Correct Answer
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Figure 15-2 -Refer to Figure 15-2.Which panel could represent the demand curve facing the soybean industry?

Correct Answer
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Which of the following is not an example of a barrier to entry?

Correct Answer
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Correct Answer
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Figure 15-5 -Refer to Figure 15-5.What price will the monopolist charge?

Correct Answer
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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
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Figure 15-1 -Refer to Figure 15-1.If a regulator requires the firm to charge a marginal cost price,what price will the firm charge?

Correct Answer
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The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?

Correct Answer
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Which of the following statements comparing monopoly with competition is correct?

Correct Answer
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Figure 15-3 -Refer to Figure 15-3.The average total cost curve for a monopoly firm is depicted by curve

Correct Answer
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Suppose ABC Aluminum Inc.owns 80% of the world's bauxite,a mineral used in the production of aluminum.Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Correct Answer
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Monopoly firms have

Correct Answer
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Figure 15-2 -Refer to Figure 15-2.If the monopolist uses perfect price discrimination,how much output does the firm produce?

Correct Answer
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Figure 15-14 -Refer to Figure 15-14.To maximize its profit,a monopolist would choose which of the following outcomes?

Correct Answer
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Figure 15-3 -Refer to Figure 15-3.If the monopoly firm is currently producing Q3 units of output,then a decrease in output will necessarily cause profit to

Correct Answer
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Exam 15: Monopoly

A monopolist earns higher profits by charging one price than by practicing price discrimination.

Correct AnswerverifiedShow Answer

Price discrimination is prohibited by antitrust laws.

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 2nd unit?

Correct AnswerverifiedShow Answer

Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Most firms have

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2.Which panel could represent the demand curve facing the soybean industry?

Correct AnswerverifiedShow Answer

Which of the following is not an example of a barrier to entry?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 15-5 -Refer to Figure 15-5.What price will the monopolist charge?

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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

Figure 15-1 -Refer to Figure 15-1.If a regulator requires the firm to charge a marginal cost price,what price will the firm charge?

Correct AnswerverifiedShow Answer

The monopolist's profit-maximizing quantity of output is determined by the intersection of which of the following two curves?

Correct AnswerverifiedShow Answer

Which of the following statements comparing monopoly with competition is correct?

Correct AnswerverifiedShow Answer

Figure 15-3 -Refer to Figure 15-3.The average total cost curve for a monopoly firm is depicted by curve

Correct AnswerverifiedShow Answer

Suppose ABC Aluminum Inc.owns 80% of the world's bauxite,a mineral used in the production of aluminum.Which of the following reasons describes the fundamental barrier to entry for the aluminum industry?

Correct AnswerverifiedShow Answer

Monopoly firms have

Correct AnswerverifiedShow Answer

Figure 15-2 -Refer to Figure 15-2.If the monopolist uses perfect price discrimination,how much output does the firm produce?

Correct AnswerverifiedShow Answer

Figure 15-14 -Refer to Figure 15-14.To maximize its profit,a monopolist would choose which of the following outcomes?

Correct AnswerverifiedShow Answer

Figure 15-3 -Refer to Figure 15-3.If the monopoly firm is currently producing Q3 units of output,then a decrease in output will necessarily cause profit to

Correct AnswerverifiedShow Answer

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