Question 1

A perfectly competitive market

Accepted Answer

A)   may not be in the best interests of society, whereas a monopoly market promotes general economic well-being
B)   promotes general economic well-being, whereas a monopoly market may not be in the best interests of society.
C)   and a monopoly market are equally likely to promote general economic well-being.
D)   is less likely to promote general economic well-being than a monopoly market.E) All of the above
F) A) and B)

Question 2

For a monopoly firm,which of the following equalities is always true?

Accepted Answer

A)   price = marginal revenue
B)   price = average revenue
C)   price = total revenue
D)   marginal revenue = marginal costE) None of the above
F) All of the above

Question 3

Give some examples of the benefits and costs of antitrust laws.

Accepted Answer

Benefits include promoting com...

Question 4

Table 15-12
The following table provides information on the price, quantity, and average total cost for a monopoly.
 
-Refer to Table 15-12.If the firm produces the profit-maximizing level of output,it will earn profits of

Accepted Answer

A)   $24.
B)   $18.
C)   $15.
D)   $12.E) A) and C)
F) A) and B)

Question 5

A monopoly

Accepted Answer

A)   can set the price it charges for its output and earn unlimited profits.
B)   takes the market price as given and earns small but positive profits.
C)   can set the price it charges for its output but faces a downward-sloping demand curve so it cannot earn unlimited profits.
D)   can set the price it charges for its output but faces a horizontal demand curve so it can earn unlimited profits.E) A) and C)
F) A) and B)

Question 6

Figure 15-6
 
-Refer to Figure 15-6.A profit-maximizing monopolist would earn total revenues of

Accepted Answer

A)   $81.
B)   $144.
C)   $225.
D)   $240.E) A) and B)
F) B) and D)

Question 7

Which of the following would be most likely to have monopoly power?

Accepted Answer

A)   a long-distance telephone service provider
B)   a local cable TV provider
C)   a large department store
D)   a gas stationE) A) and C)
F) A) and D)

Question 8

The supply curve for the monopolist

Accepted Answer

A)   is horizontal.
B)   is vertical.
C)   is upward sloping.
D)   does not exist.E) B) and C)
F) A) and D)

Question 9

Price discrimination explains why Ivy League universities often base tuition costs on students'

Accepted Answer

A)   age.
B)   financial resources.
C)   high school GPA.
D)   gender.E) B) and C)
F) A) and D)

Question 10

Table 15-18
Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination.
 
-Refer to Table 15-18.What are Tommy's Ties Company's fixed costs?

Accepted Answer

A)   $100
B)   $150
C)   $354
D)   $654E) A) and D)
F) None of the above

Question 11

Private ownership of a monopoly may benefit society because the monopoly will have an incentive to

Accepted Answer

A)   charge a price that is consistent with that of a benevolent social planner.
B)   charge a price that prevents some people from buying.
C)   price its good according to the intersection of marginal cost and average revenue.
D)   lower its costs to earn a higher profit.E) B) and C)
F) A) and B)

Question 12

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

Accepted Answer

A)   Dawn charges a higher price than her competitors for her landscape-architecture services.
B)   Rhianna obtains a copyright for a short story that she wrote and published.
C)   Debbie offers free samples of her chocolate chip cookies to attract new customers.
D)   Bev charges a lower price than her competitors for her desktop-publishing services.E) A) and B)
F) A) and C)

Question 13

Scenario 15-5
An airline knows that there are two types of travelers: business travelers and vacationers. For a particular flight, there are 100 business travelers who will pay $600 for a ticket while there are 50 vacationers who will pay $300 for a ticket. There are 150 seats available on the plane. Suppose the cost to the airline of providing the flight is $20,000, which includes the cost of the pilots, flight attendants, fuel, etc.
-Refer to Scenario 15-5.How much profit will the airline earn if it engages in price discrimination?

Accepted Answer

A)   -$5,000
B)   $40,000
C)   $55,000
D)   $75,000E) A) and B)
F) C) and D)

Question 14

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) A) and B)
F) B) and C)

Question 15

Amanda inherited the only local cable TV company in town after her father passed away.The company is completely unregulated by the government and is therefore free to operate as it wishes.Assume that Amanda understands the true power of her new monopoly.Which of the following statements is (are) correct?
(i) She will be able to set the price of cable TV service at whatever level she wishes.
(ii) The customers will be forced to purchase cable TV service at whatever price she wants to set.
(iii) She will be able to achieve any profit level that she desires.

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (iii)  only
D)   (i) , (ii) , and (iii) E) C) and D)
F) B) and C)

Question 16

Scenario 15-7
Black Box Cable TV is able to purchase an exclusive right to sell a premium movie channel (PMC)  in its market area. Let's assume that Black Box Cable pays $150,000 a year for the exclusive marketing rights to PMC. Since Black Box has already installed cable to all of the homes in its market area, the marginal cost of delivering PMC to subscribers is zero. The manager of Black Box needs to know what price to charge for the PMC service to maximize her profit. Before setting price, she hires an economist to estimate demand for the PMC service. The economist discovers that there are two types of subscribers who value premium movie channels. First are the 4,000 die-hard TV viewers who will pay as much as $150 a year for the new PMC premium channel. Second, the PMC channel will appeal to 20,000 occasional TV viewers who will pay as much as $20 a year for a subscription to PMC.
-Refer to Scenario 15-7.What is the deadweight loss associated with the nondiscriminating pricing policy compared to the price discriminating policy?

Accepted Answer

A)   $375,000
B)   $400,000
C)   $475,000
D)   It cannot be determined from the information provided.E) A) and B)
F) B) and D)

Question 17

Figure 15-8
 
-Refer to Figure 15-8.To maximize its profit,a monopolist would choose which of the following outcomes?

Accepted Answer

A)   100 units of output and a price of $10 per unit
B)   100 units of output and a price of $20 per unit
C)   150 units of output and a price of $15 per unit
D)   200 units of output and a price of $20 per unitE) A) and B)
F) C) and D)

Question 18

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) B) and D)
F) None of the above

Question 19

Table 15-10
The monopolist faces the following demand curve:
 
-Refer to Table 15-10.If the monopolist has total fixed costs of $40 and a constant marginal cost of $5,how much profit can the firm earn at the profit-maximizing level of output?

Accepted Answer

A)   $128
B)   $120
C)   $80
D)   $8E) A) and B)
F) A) and C)

Question 20

Figure 15-15
 
-Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Accepted Answer

A)   $0.
B)   $100.
C)   $200.
D)   $500.E) A) and C)
F) C) and D)

Exam 15: Monopoly.

Figure 15-8 -Refer to Figure 15-8.To maximize its profit,a monopolist would choose which of the following outcomes?

Correct Answer
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For a monopoly firm,which of the following equalities is always true?

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

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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Private ownership of a monopoly may benefit society because the monopoly will have an incentive to

Correct Answer
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Table 15-12 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-12.If the firm produces the profit-maximizing level of output,it will earn profits of

Correct Answer
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Table 15-18 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. -Refer to Table 15-18.What are Tommy's Ties Company's fixed costs?

Correct Answer
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Figure 15-6 -Refer to Figure 15-6.A profit-maximizing monopolist would earn total revenues of

Correct Answer
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Give some examples of the benefits and costs of antitrust laws.

Correct Answer
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Benefits include promoting com...
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A perfectly competitive market

Correct Answer
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Figure 15-15 -Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

Correct Answer
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The supply curve for the monopolist

Correct Answer
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Table 15-10 The monopolist faces the following demand curve: -Refer to Table 15-10.If the monopolist has total fixed costs of $40 and a constant marginal cost of $5,how much profit can the firm earn at the profit-maximizing level of output?

Correct Answer
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Price discrimination explains why Ivy League universities often base tuition costs on students'

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

Correct Answer
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Which of the following would be most likely to have monopoly power?

Correct Answer
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A monopoly

Correct Answer
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Correct Answer
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Exam 15: Monopoly.

Figure 15-8 -Refer to Figure 15-8.To maximize its profit,a monopolist would choose which of the following outcomes?

Correct AnswerverifiedShow Answer

For a monopoly firm,which of the following equalities is always true?

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

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

Private ownership of a monopoly may benefit society because the monopoly will have an incentive to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-12 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-12.If the firm produces the profit-maximizing level of output,it will earn profits of

Correct AnswerverifiedShow Answer

Table 15-18 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. -Refer to Table 15-18.What are Tommy's Ties Company's fixed costs?

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Figure 15-6 -Refer to Figure 15-6.A profit-maximizing monopolist would earn total revenues of

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Give some examples of the benefits and costs of antitrust laws.

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A perfectly competitive market

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Figure 15-15 -Refer to Figure 15-15.If the monopoly firm perfectly price discriminates,then the deadweight loss amounts to

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The supply curve for the monopolist

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-10 The monopolist faces the following demand curve: -Refer to Table 15-10.If the monopolist has total fixed costs of $40 and a constant marginal cost of $5,how much profit can the firm earn at the profit-maximizing level of output?

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Price discrimination explains why Ivy League universities often base tuition costs on students'

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

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Which of the following would be most likely to have monopoly power?

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A monopoly

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Correct AnswerverifiedShow Answer

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Benefits include promoting com...
View Answer

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