Question 1

Reduced competition through merging of companies will raise social welfare

Accepted Answer

A)  if the social cost from the synergies exceeds the benefit of increased market power.
B)  if the benefit from the synergies exceeds the social cost of increased market power.
C)  always.
D)  never.E) All of the above
F) A) and B)

Question 2

Which of the following statements is not correct?

Accepted Answer

A)  The competitive firm produces where P = MC.
B)  The monopolist produces where P = MC.
C)  The competitive firm produces where MR = MC.
D)  The monopolist produces where MR = MC.E) B) and C)
F) A) and B)

Question 3

Which of the following is an example of public ownership of a monopoly?

Accepted Answer

A)  DeBeers
B)  Microsoft
C)  U.S. Postal Service
D)  AT&TE) None of the above
F) A) and B)

Question 4

Figure 15-9 
-Refer to Figure 15-9. The deadweight loss caused by a profit-maximizing monopoly amounts to

Accepted Answer

A)  $250.
B)  $500.
C)  $750.
D)  $1,000.E) B) and C)
F) A) and B)

Question 5

A market force that can prevent firms from price discriminating is

Accepted Answer

A)  fluctuating resource prices.
B)  arbitrage.
C)  high fixed costs.
D)  marginal-cost pricing.E) A) and B)
F) None of the above

Question 6

Assume that a monopolist decides to maximize revenue rather than profit. How does this operating objective change the size of the deadweight loss? If you are a "benevolent" manager of a monopoly firm and are interested in reducing the deadweight loss of monopoly, should you maximize profits or maximize revenue? Explain your answer.

Accepted Answer

A revenue maximizer operates where MR = ...

Question 7

If a monopolist can practice perfect price discrimination, the monopolist will

Accepted Answer

A)  eliminate consumer surplus.
B)  eliminate deadweight loss.
C)  maximize profits.
D)  All of the above are correct.E) A) and C)
F) B) and C)

Question 8

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

Accepted Answer

A)  -$120.00.
B)  -$75.40.
C)  -$0.40.
D)  $75.40.E) All of the above
F) A) and B)

Question 9

A monopolist

Accepted Answer

A)  has a supply curve that is upward-sloping, just like a competitive firm.
B)  does not have a supply curve because the monopolist sets its price at the same time it chooses the quantity to supply.
C)  has a horizontal supply curve, just like a competitive firm.
D)  does not have a supply curve because marginal revenue exceeds the price it charges for its products.E) All of the above
F) None of the above

Question 10

Figure 15-1 
-Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm must

Accepted Answer

A)  lie entirely above the average total cost curve.
B)  lie entirely below the average total cost curve.
C)  be U-shaped.
D)  be horizontal.E) All of the above
F) None of the above

Question 11

For a monopolist, marginal revenue is

Accepted Answer

A)  positive when the demand effect is greater than the supply effect.
B)  positive when the monopoly effect is greater than the competitive effect.
C)  negative when the price effect is greater than the output effect.
D)  negative when the output effect is greater than the price effect.E) A) and C)
F) B) and C)

Question 12

Price discrimination

Accepted Answer

A)  is illegal in the United States and Europe.
B)  can occur in both perfectly competitive and monopoly markets.
C)  is illogical because it does not maximize profits.
D)  can maximize profits if the seller can prevent the resale of goods between customers.E) C) and D)
F) B) and D)

Question 13

Table 15-8
The following table provides information on the price, quantity, and average total cost for a monopoly. 
-Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Accepted Answer

A)  The firm saves $15.
B)  $15
C)  $30
D)  $40E) A) and B)
F) A) and C)

Question 14

The government may choose to do nothing to reduce monopoly inefficiency because the "fix" may be worse than the problem.

Accepted Answer

A) True 
 B)False

Question 15

In many countries, the government chooses to "internalize" the monopoly by owning monopoly providers of goods and services. (In some cases these firms are "nationalized," and the government actually buys or confiscates firms that operate in monopoly markets). What would be the advantages and disadvantages of such an approach to ensure that the "best interest of society" is promoted in these markets? Explain your answer.

Accepted Answer

As long as the government "owner" pursue...

Question 16

Figure 15-4 
-Refer to Figure 15-4. If a regulator requires this firm to charge a fair return price, which letter represents the amount of output it will produce?

Accepted Answer

The answer of Figure 15-4 
-Refer to Figure 15-4. If...

Question 17

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. 
-​Refer to Figure 15-22. Based upon the information shown, how many units will Bearclaws produce to maximize profits?

Accepted Answer

A)  ​70.
B)  ​90.
C)  ​105.
D)  ​130.E) All of the above
F) B) and C)

Question 18

For a monopoly, marginal revenue is often greater than the price it charges for its good.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not correct?

Accepted Answer

A)  Antitrust laws may prevent mergers that would actually raise social welfare.
B)  Public ownership is the most common public policy toward monopolies in the United States.
C)  Regulation is a common strategy for a natural monopoly.
D)  Sometimes the best public policy toward a monopoly may be to do nothing.E) B) and D)
F) B) and C)

Question 20

When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

Accepted Answer

A)  a transfer of benefits from the consumer to the producer.
B)  a loss in total welfare.
C)  the higher marginal costs incurred by the monopolists in comparison to competitive firms.
D)  the higher marginal revenues gained by the monopolists in comparison to competitive firms.E) All of the above
F) B) and D)

Exam 15: Monopoly

For a monopoly, marginal revenue is often greater than the price it charges for its good.

Correct Answer
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Which of the following is an example of public ownership of a monopoly?

Correct Answer
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The government may choose to do nothing to reduce monopoly inefficiency because the "fix" may be worse than the problem.

Correct Answer
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Figure 15-1 -Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm must

Correct Answer
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A monopolist

Correct Answer
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Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, how many units will Bearclaws produce to maximize profits?

Correct Answer
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When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

Correct Answer
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Which of the following is not correct?

Correct Answer
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Correct Answer
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A revenue maximizer operates where MR = ...
View Answer

Which of the following statements is not correct?

Correct Answer
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Price discrimination

Correct Answer
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Figure 15-4 -Refer to Figure 15-4. If a regulator requires this firm to charge a fair return price, which letter represents the amount of output it will produce?

Correct Answer
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If a monopolist can practice perfect price discrimination, the monopolist will

Correct Answer
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For a monopolist, marginal revenue is

Correct Answer
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Figure 15-9 -Refer to Figure 15-9. The deadweight loss caused by a profit-maximizing monopoly amounts to

Correct Answer
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Correct Answer
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As long as the government "owner" pursue...
View Answer

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301^st unit of output is

Correct Answer
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A market force that can prevent firms from price discriminating is

Correct Answer
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Reduced competition through merging of companies will raise social welfare

Correct Answer
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Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Correct Answer
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Exam 15: Monopoly

For a monopoly, marginal revenue is often greater than the price it charges for its good.

Correct AnswerverifiedShow Answer

Which of the following is an example of public ownership of a monopoly?

Correct AnswerverifiedShow Answer

The government may choose to do nothing to reduce monopoly inefficiency because the "fix" may be worse than the problem.

Correct AnswerverifiedShow Answer

Figure 15-1 -Refer to Figure 15-1. Considering the relationship between average total cost and marginal cost, the marginal cost curve for this firm must

Correct AnswerverifiedShow Answer

A monopolist

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​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -​Refer to Figure 15-22. Based upon the information shown, how many units will Bearclaws produce to maximize profits?

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When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent

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Which of the following is not correct?

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Correct AnswerverifiedA revenue maximizer operates where MR = ...View AnswerShow Answer

Which of the following statements is not correct?

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Price discrimination

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Figure 15-4 -Refer to Figure 15-4. If a regulator requires this firm to charge a fair return price, which letter represents the amount of output it will produce?

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If a monopolist can practice perfect price discrimination, the monopolist will

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For a monopolist, marginal revenue is

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Figure 15-9 -Refer to Figure 15-9. The deadweight loss caused by a profit-maximizing monopoly amounts to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedAs long as the government "owner" pursue...View AnswerShow Answer

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

Correct AnswerverifiedShow Answer

A market force that can prevent firms from price discriminating is

Correct AnswerverifiedShow Answer

Reduced competition through merging of companies will raise social welfare

Correct AnswerverifiedShow Answer

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the additional cost to the firm when the monopolist lowers the price from $18 to $12?

Correct AnswerverifiedShow Answer

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Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, how many units will Bearclaws produce to maximize profits?

Correct Answer
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Correct Answer
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Correct Answer
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A revenue maximizer operates where MR = ...
View Answer

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As long as the government "owner" pursue...
View Answer

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301^st unit of output is

Correct Answer
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Correct Answer
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Correct Answer
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