Question 1

For a monopoly able to perfectly price discriminate, the marginal revenue curve coincides with the demand curve.

Accepted Answer

A) True 
 B)False  True

Question 2

A monopoly is a firm that produces a good or service for which no close substitute exists.

Accepted Answer

A) True 
 B)False  True

Question 3

-In the above figure, if the natural monopoly is regulated and a marginal cost pricing rule is followed, then the consumer surplus will be

Accepted Answer

A)  $192 million. 
B)  $108 million. 
C)  $60 million. 
D)  $48 million. 
A)  $192 million. 
B)  $108 million. 
C)  $60 million. 
D)  $48 million. A

Question 4

Under rate of return regulation, a natural monopoly ________.

Accepted Answer

A)  has an incentive to inflate its costs 
B)  has an incentive to deflate its costs and capture more of the market 
C)  makes an economic profit 
D)  sets price equal to marginal cost 
A)  has an incentive to inflate its costs 
B)  has an incentive to deflate its costs and capture more of the market 
C)  makes an economic profit 
D)  sets price equal to marginal cost

Question 5

"A single-price monopolist charges a higher price and produces more output than a perfectly competitive industry." Is the previous statement correct or incorrect? Explain your answer.

Accepted Answer

The statement is partially correct becau

Question 6

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up is regulated and follows an average cost pricing rule?

Accepted Answer

A)  acg 
B)  degf 
C)  deg 
D)  There is no deadweight loss. 
A)  acg 
B)  degf 
C)  deg 
D)  There is no deadweight loss.

Question 7

Regulation of a natural monopoly will maximize the sum of consumer surplus and producer surplus if the firm is regulated with

Accepted Answer

A)  an average cost pricing rule. 
B)  a marginal cost pricing rule. 
C)  rate of return regulation. 
D)  All of the above answers are correct. 
A)  an average cost pricing rule. 
B)  a marginal cost pricing rule. 
C)  rate of return regulation. 
D)  All of the above answers are correct.

Question 8

-Which area in the above figure equals the producer surplus under perfect price discrimination?

Accepted Answer

A)  A + B + C + D + E + F + G + H + I + J + K + L 
B)  A + B + C + D + E + F + G + H + I + J + K 
C)  A + B + C + D + E + F + G + H 
D)  C + D + E + F + G + H 
A)  A + B + C + D + E + F + G + H + I + J + K + L 
B)  A + B + C + D + E + F + G + H + I + J + K 
C)  A + B + C + D + E + F + G + H 
D)  C + D + E + F + G + H

Question 9

-The figure above shows the costs and demand curves for the Bigshow Cable Company. To avoid any deadweight loss in the market served by Bigshow, the regulator must set the price at

Accepted Answer

A)  $8. 
B)  $6. 
C)  $4. 
D)  $2. 
A)  $8. 
B)  $6. 
C)  $4. 
D)  $2.

Question 10

Why are water companies considered a natural monopoly?

Accepted Answer

Once one water company incurs the cost o

Question 11

Why do some firms practice price discrimination? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

Accepted Answer

Price discrimination helps businesses ca

Question 12

-The figure above shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly that charges one price to all customers, then consumer surplus is ________ and it creates a deadweight loss of ________.

Accepted Answer

A)  $800; $400 
B)  $200; $100 
C)  $400; $200 
D)  $0; $200 
A)  $800; $400 
B)  $200; $100 
C)  $400; $200 
D)  $0; $200

Question 13

A copyright creates a monopoly by restricting ________.

Accepted Answer

A)  the prices that can be charged 
B)  demand for the product 
C)  entry into the market 
D)  the number of creators and inventors 
A)  the prices that can be charged 
B)  demand for the product 
C)  entry into the market 
D)  the number of creators and inventors

Question 14

Monopolies can make an economic profit in the long run because there

Accepted Answer

A)  are close substitutes for the product. 
B)  is free entry and exit. 
C)  is inelastic demand from consumers. 
D)  is a barrier to entry. 
A)  are close substitutes for the product. 
B)  is free entry and exit. 
C)  is inelastic demand from consumers. 
D)  is a barrier to entry.

Question 15

Can an unregulated monopoly make an economic profit in the long run? Explain your answer.

Accepted Answer

An unregulated monopoly can make an econ

Question 16

-In the above figure, what quantity will a single-price monopolist produce?

Accepted Answer

A)  Q1 
B)  Q2 
C)  Q3 
D)  Q4 
A)  Q1 
B)  Q2 
C)  Q3 
D)  Q4

Question 17

-Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sue's demand and marginal revenue curves are illustrated in the figure above. The change in the total revenue from renting the 15th surfboard is

Accepted Answer

A)  $20. 
B)  $15. 
C)  $10. 
D)  $0. 
A)  $20. 
B)  $15. 
C)  $10. 
D)  $0.

Question 18

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 35th haircut?

Accepted Answer

A)  zero 
B)  -$5.00 
C)  $5.00 
D)  $12.50 
A)  zero 
B)  -$5.00 
C)  $5.00 
D)  $12.50

Question 19

What is perfect price discrimination? Is perfect price discrimination efficient? Why or why not?

Accepted Answer

Perfect price discrimination occurs if a

Question 20

-In the figure above, the curve labeled "W" can be a

Accepted Answer

A)  monopoly's demand curve. 
B)  monopoly's marginal revenue curve. 
C)  perfectly competitive firm's demand curve. 
D)  perfectly competitive firm's marginal revenue curve. 
A)  monopoly's demand curve. 
B)  monopoly's marginal revenue curve. 
C)  perfectly competitive firm's demand curve. 
D)  perfectly competitive firm's marginal revenue curve.

For a monopoly able to perfectly price discriminate, the marginal revenue curve coincides with the demand curve.

A monopoly is a firm that produces a good or service for which no close substitute exists.

-In the above figure, if the natural monopoly is regulated and a marginal cost pricing rule is followed, then the consumer surplus will be

Under rate of return regulation, a natural monopoly ________.

"A single-price monopolist charges a higher price and produces more output than a perfectly competitive industry." Is the previous statement correct or incorrect? Explain your answer.

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up is regulated and follows an average cost pricing rule?

Regulation of a natural monopoly will maximize the sum of consumer surplus and producer surplus if the firm is regulated with

-Which area in the above figure equals the producer surplus under perfect price discrimination?

-The figure above shows the costs and demand curves for the Bigshow Cable Company. To avoid any deadweight loss in the market served by Bigshow, the regulator must set the price at

Why are water companies considered a natural monopoly?

Why do some firms practice price discrimination? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

-The figure above shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly that charges one price to all customers, then consumer surplus is and it creates a deadweight loss of .

A copyright creates a monopoly by restricting ________.

Monopolies can make an economic profit in the long run because there

Can an unregulated monopoly make an economic profit in the long run? Explain your answer.

-In the above figure, what quantity will a single-price monopolist produce?

-Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sue's demand and marginal revenue curves are illustrated in the figure above. The change in the total revenue from renting the 15th surfboard is

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 35th haircut?

What is perfect price discrimination? Is perfect price discrimination efficient? Why or why not?

-In the figure above, the curve labeled "W" can be a

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 13: Monopoly

For a monopoly able to perfectly price discriminate, the marginal revenue curve coincides with the demand curve.

A monopoly is a firm that produces a good or service for which no close substitute exists.

-In the above figure, if the natural monopoly is regulated and a marginal cost pricing rule is followed, then the consumer surplus will be

Under rate of return regulation, a natural monopoly ________.

"A single-price monopolist charges a higher price and produces more output than a perfectly competitive industry." Is the previous statement correct or incorrect? Explain your answer.

-The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up is regulated and follows an average cost pricing rule?

Regulation of a natural monopoly will maximize the sum of consumer surplus and producer surplus if the firm is regulated with

-Which area in the above figure equals the producer surplus under perfect price discrimination?

-The figure above shows the costs and demand curves for the Bigshow Cable Company. To avoid any deadweight loss in the market served by Bigshow, the regulator must set the price at

Why are water companies considered a natural monopoly?

Why do some firms practice price discrimination? Relate your answer to the common practice of public colleges charging lower tuition to in-state students and higher tuition to out-of-state students.

-The figure above shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly that charges one price to all customers, then consumer surplus is ________ and it creates a deadweight loss of ________.

A copyright creates a monopoly by restricting ________.

Monopolies can make an economic profit in the long run because there

Can an unregulated monopoly make an economic profit in the long run? Explain your answer.

-In the above figure, what quantity will a single-price monopolist produce?

-Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sue's demand and marginal revenue curves are illustrated in the figure above. The change in the total revenue from renting the 15th surfboard is

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 35th haircut?

What is perfect price discrimination? Is perfect price discrimination efficient? Why or why not?

-In the figure above, the curve labeled "W" can be a

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-The figure above shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly that charges one price to all customers, then consumer surplus is and it creates a deadweight loss of .