Question 1

If a monopoly's demand curve shifts to the right,the

Accepted Answer

A)  monopoly will charge a higher price. 
B)  monopoly will charge a lower price. 
C)  monopoly will sell more. 
D)  monopoly's decision cannot be determined. 
A)  monopoly will charge a higher price. 
B)  monopoly will charge a lower price. 
C)  monopoly will sell more. 
D)  monopoly's decision cannot be determined. D

Question 2

Why does a patent stimulate research?

Accepted Answer

A)  Patents give firms time to do research. 
B)  Patents give firms the opportunity to recover research costs and thus serve as a profit motive. 
C)  Without patents firms would not research as much. 
D)  They don't. 
A)  Patents give firms time to do research. 
B)  Patents give firms the opportunity to recover research costs and thus serve as a profit motive. 
C)  Without patents firms would not research as much. 
D)  They don't. B

Question 3

The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.

Accepted Answer

A) True 
 B)False  True

Question 4

An exclusive right to sell a new and useful product,process,substance,or design for a fixed period of time is called a

Accepted Answer

A)  patent. 
B)  barrier to entry. 
C)  monopoly. 
D)  research disincentive. 
A)  patent. 
B)  barrier to entry. 
C)  monopoly. 
D)  research disincentive.

Question 5

If the inverse demand curve a monopoly faces is p = 100 - 2Q,and MC is constant at 16,then profit maximization

Accepted Answer

A)  is achieved when 21 units are produced. 
B)  is achieved by setting price equal to 21. 
C)  is achieved only by shutting down in the short run. 
D)  cannot be determined solely from the information provided. 
A)  is achieved when 21 units are produced. 
B)  is achieved by setting price equal to 21. 
C)  is achieved only by shutting down in the short run. 
D)  cannot be determined solely from the information provided.

Question 6

Suppose a monopolist's demand curve is P = 60 - Q,and its cost function is C = 10Q + 50 so its marginal cost is 10.If a governmental agency wished to set the price so that it created the smallest deadweight loss without causing the monopolist to have negative economic profits (thus shutting down),that price would be

Accepted Answer

A)  $10.00. 
B)  $11.02. 
C)  $14.57. 
D)  $35.00. 
A)  $10.00. 
B)  $11.02. 
C)  $14.57. 
D)  $35.00.

Question 7

The monopolist's marginal revenue curve

Accepted Answer

A)  doesn't exist. 
B)  lies below the demand curve. 
C)  is identical to the demand curve. 
D)  lies above the demand curve. 
A)  doesn't exist. 
B)  lies below the demand curve. 
C)  is identical to the demand curve. 
D)  lies above the demand curve.

Question 8

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

Accepted Answer

A)  the natural monopoly will shut down. 
B)  the natural monopoly will still make high profits. 
C)  the natural monopoly's marginal cost curve will shift up. 
D)  total welfare is maximized. 
A)  the natural monopoly will shut down. 
B)  the natural monopoly will still make high profits. 
C)  the natural monopoly's marginal cost curve will shift up. 
D)  total welfare is maximized.

Question 9

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Accepted Answer

Microsoft marketed Windows really well a

Question 10

Explain why a monopolist has no supply curve.

Accepted Answer

By definition,a supply curve shows the a

Question 11

In a recent court case,an expert witness defined a monopoly as a firm that can "raise price without reducing its total revenue." What does this imply about the elasticity of demand? Would this definition hold for a profit-maximizing monopoly? Explain.

Accepted Answer

If the firm raises price,the quantity so

Question 12

The use of "introductory prices" suggests

Accepted Answer

A)  firms engaged in multi-period decision making. 
B)  firms engaged in price gouging. 
C)  firms engaged in anti-competitive behavior. 
D)  firms engaged in single-period decision making. 
A)  firms engaged in multi-period decision making. 
B)  firms engaged in price gouging. 
C)  firms engaged in anti-competitive behavior. 
D)  firms engaged in single-period decision making.

Question 13

-The above figure shows the demand and cost curves facing a monopoly.The deadweight loss of this monopoly is

Accepted Answer

A)  $100. 
B)  $250. 
C)  $1,250. 
D)  $2,500. 
A)  $100. 
B)  $250. 
C)  $1,250. 
D)  $2,500.

Question 14

Patents

Accepted Answer

A)  will create a profit incentive to do research. 
B)  might be welfare reducing if granted for too long a period. 
C)  serve as a barrier to entry. 
D)  All of the above. 
A)  will create a profit incentive to do research. 
B)  might be welfare reducing if granted for too long a period. 
C)  serve as a barrier to entry. 
D)  All of the above.

Question 15

-The above figure shows the demand and cost curves facing a monopoly.If a $100 per unit tax is charged,what is the incidence of the tax on consumers?

Accepted Answer

A)  100% 
B)  50% 
C)  25% 
D)  0% 
A)  100% 
B)  50% 
C)  25% 
D)  0%

Question 16

Which of the following is most necessary for a monopolist to survive in the long run?

Accepted Answer

A)  a legal protection from entry 
B)  a perfect product 
C)  a brilliant Chief Operating Officer 
D)  an excellent marketing campaign 
A)  a legal protection from entry 
B)  a perfect product 
C)  a brilliant Chief Operating Officer 
D)  an excellent marketing campaign

Question 17

-The above figure shows the demand and marginal cost curves for a monopoly.The deadweight loss of this monopoly equals

Accepted Answer

A)  h. 
B)  c. 
C)  c + f. 
D)  c + d + e + f. 
A)  h. 
B)  c. 
C)  c + f. 
D)  c + d + e + f.

Question 18

The less elastic is the demand for a firm's product,the greater is that firm's market power.

Accepted Answer

A) True 
 B)False

Question 19

-The above figure shows the demand and cost curves facing a monopolist.The monopoly maximizes profit by setting price equal to

Accepted Answer

A)  $100. 
B)  $200. 
C)  $300. 
D)  $400. 
A)  $100. 
B)  $200. 
C)  $300. 
D)  $400.

Question 20

Which is an ironic solution to the government protected monopoly?

Accepted Answer

A)  The government might try to "force" less competition in the market. 
B)  The government might "do more" by "doing less," i.e., by removing the monopoly's protection. 
C)  The dead weight loss goes to the government. 
D)  The inherent unfairness of monopoly can only be solved by dictatorship. 
A)  The government might try to "force" less competition in the market. 
B)  The government might "do more" by "doing less," i.e., by removing the monopoly's protection. 
C)  The dead weight loss goes to the government. 
D)  The inherent unfairness of monopoly can only be solved by dictatorship.

If a monopoly's demand curve shifts to the right,the

Why does a patent stimulate research?

The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.

An exclusive right to sell a new and useful product,process,substance,or design for a fixed period of time is called a

If the inverse demand curve a monopoly faces is p = 100 - 2Q,and MC is constant at 16,then profit maximization

The monopolist's marginal revenue curve

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Explain why a monopolist has no supply curve.

In a recent court case,an expert witness defined a monopoly as a firm that can "raise price without reducing its total revenue." What does this imply about the elasticity of demand? Would this definition hold for a profit-maximizing monopoly? Explain.

The use of "introductory prices" suggests

-The above figure shows the demand and cost curves facing a monopoly.The deadweight loss of this monopoly is

Patents

-The above figure shows the demand and cost curves facing a monopoly.If a $100 per unit tax is charged,what is the incidence of the tax on consumers?

Which of the following is most necessary for a monopolist to survive in the long run?

-The above figure shows the demand and marginal cost curves for a monopoly.The deadweight loss of this monopoly equals

The less elastic is the demand for a firm's product,the greater is that firm's market power.

-The above figure shows the demand and cost curves facing a monopolist.The monopoly maximizes profit by setting price equal to

Which is an ironic solution to the government protected monopoly?

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters

Exam 11: Monopoly

If a monopoly's demand curve shifts to the right,the

Why does a patent stimulate research?

The deadweight loss represents the sum of additional consumer and producer surplus should the firm produce the quantity where P = MC rather than where MR = MC.

An exclusive right to sell a new and useful product,process,substance,or design for a fixed period of time is called a

If the inverse demand curve a monopoly faces is p = 100 - 2Q,and MC is constant at 16,then profit maximization

The monopolist's marginal revenue curve

If the government attempts to force a natural monopoly to charge a price equal to marginal cost,

Explain Microsoft Windows' monopoly positions in terms of network externalities.

Explain why a monopolist has no supply curve.

In a recent court case,an expert witness defined a monopoly as a firm that can "raise price without reducing its total revenue." What does this imply about the elasticity of demand? Would this definition hold for a profit-maximizing monopoly? Explain.

The use of "introductory prices" suggests

-The above figure shows the demand and cost curves facing a monopoly.The deadweight loss of this monopoly is

Patents

-The above figure shows the demand and cost curves facing a monopoly.If a $100 per unit tax is charged,what is the incidence of the tax on consumers?

Which of the following is most necessary for a monopolist to survive in the long run?

-The above figure shows the demand and marginal cost curves for a monopoly.The deadweight loss of this monopoly equals

The less elastic is the demand for a firm's product,the greater is that firm's market power.

-The above figure shows the demand and cost curves facing a monopolist.The monopoly maximizes profit by setting price equal to

Which is an ironic solution to the government protected monopoly?

Introduction

Supply and Demand

Applying the Supply and Demand Model

Consumer Choice

Applying Consumer Theory

Firms and Production

Costs

Competitive Firms and Markets

Applying the Competitive Model

General Equilibrium and Economic Welfare

Pricing and Advertising

Oligopoly and Monopolistic Competition

Game Theory

Factor Markets

Interest Rates, Investments, and Capital Markets

Uncertainty

Externalities, Open-Access, and Public Goods

Asymmetric Information

Contracts and Moral Hazards

Filters