Question 1

If a monopolist's price is $50 per unit and its marginal cost is $25,then

Accepted Answer

A) to maximise profit the firm should increase output. 
B) to maximise profit the firm should decrease output. 
C) to maximise profit the firm should continue to produce the output it is producing. 
D) Not enough information is given to say what the firm should do to maximise profit. 
A) to maximise profit the firm should increase output. 
B) to maximise profit the firm should decrease output. 
C) to maximise profit the firm should continue to produce the output it is producing. 
D) Not enough information is given to say what the firm should do to maximise profit.

Question 2

Which of the following products allows the seller to identify different groups of consumers (segment the market)at virtually no cost?

Accepted Answer

A) early bird dinner specials 
B) books sold online 
C) a pair of Bose speakers 
D) iPhones 
A) early bird dinner specials 
B) books sold online 
C) a pair of Bose speakers 
D) iPhones

Question 3

Wendell can sell five motor homes per week at a price of $22 000.If he lowers the price of motor homes to $20 000 per week he will sell six motor homes.What is the marginal revenue of the sixth motor home?

Accepted Answer

A) $10 000 
B) $12 000 
C) $20 000 
D) $22 000 
A) $10 000 
B) $12 000 
C) $20 000 
D) $22 000

Question 4

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements regarding economic surplus in each market structure is true?

Accepted Answer

A) Under perfectly competitive conditions,economic surplus in this industry equals consumer surplus plus producer surplus.Under monopoly conditions,some consumer surplus is transferred to producer surplus,but economic surplus is the same as it was under perfectly competitive conditions. 
B) Under perfectly competitive conditions,economic surplus in this industry is maximised.Under monopoly conditions,economic surplus is minimised. 
C) Under perfectly competitive conditions,economic surplus is equal to consumer surplus;there is no producer surplus because firms are price-takers.Under monopoly conditions,economic surplus is equal to producer surplus. 
D) Under perfectly competitive conditions,economic surplus is maximised.Under monopoly conditions,economic surplus is less than under perfect competition and there is a deadweight loss. 
A) Under perfectly competitive conditions,economic surplus in this industry equals consumer surplus plus producer surplus.Under monopoly conditions,some consumer surplus is transferred to producer surplus,but economic surplus is the same as it was under perfectly competitive conditions. 
B) Under perfectly competitive conditions,economic surplus in this industry is maximised.Under monopoly conditions,economic surplus is minimised. 
C) Under perfectly competitive conditions,economic surplus is equal to consumer surplus;there is no producer surplus because firms are price-takers.Under monopoly conditions,economic surplus is equal to producer surplus. 
D) Under perfectly competitive conditions,economic surplus is maximised.Under monopoly conditions,economic surplus is less than under perfect competition and there is a deadweight loss.

Question 5

Figure 9-2   Figure 9-2 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 9-2.The firm's profit-maximising price is

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) P4. 
A) P1. 
B) P2. 
C) P3. 
D) P4.

Question 6

'Being the only seller in the market,the monopolist can choose any price and quantity it desires.' Evaluate this statement: Is it true or false? Explain your answer.

Accepted Answer

The statement is false.The monopolist ca

Question 7

A firm that can effectively price discriminate will charge a higher price to

Accepted Answer

A) customers who have the more elastic demand for the product. 
B) customers who have the more inelastic demand for the product. 
C) buyers who belong to the largest market segment. 
D) buyers who are members of the smallest market segment. 
A) customers who have the more elastic demand for the product. 
B) customers who have the more inelastic demand for the product. 
C) buyers who belong to the largest market segment. 
D) buyers who are members of the smallest market segment.

Question 8

The term 'early adopters' refers to

Accepted Answer

A) firms that are the first to implement a new technology that is used to produce new goods or services. 
B) book clubs that are first to recommend best-selling books to their members. 
C) consumers who respond quickly to fads,seasonal changes,etc. 
D) consumers who are willing to pay high prices to be among the first to own new products. 
A) firms that are the first to implement a new technology that is used to produce new goods or services. 
B) book clubs that are first to recommend best-selling books to their members. 
C) consumers who respond quickly to fads,seasonal changes,etc. 
D) consumers who are willing to pay high prices to be among the first to own new products.

Question 9

Figure 9-3   Figure 9-3 above shows the demand and cost curves facing a monopolist.
-Refer to Figure 9-3.Suppose the monopolist represented in the diagram above produces positive output.What is the profit-maximising/loss-minimising output level?

Accepted Answer

A) 630 units 
B) 800 units 
C) 850 units 
D) 880 units 
A) 630 units 
B) 800 units 
C) 850 units 
D) 880 units

Question 10

Figure 9-9   Figure 9-9 shows the demand and cost curves for a monopolist.
-Refer to Figure 9-9.What is the difference between the monopoly output and the perfectly competitive output?

Accepted Answer

A) 140 units 
B) 240 units 
C) 340 units 
D) 560 units 
A) 140 units 
B) 240 units 
C) 340 units 
D) 560 units

Question 11

Yield management and price discrimination have enabled firms to increase profits and,at the same time,

Accepted Answer

A) reduce the cost of production. 
B) capture some consumer surplus. 
C) reduce transactions costs. 
D) transfer some producer surplus to consumers. 
A) reduce the cost of production. 
B) capture some consumer surplus. 
C) reduce transactions costs. 
D) transfer some producer surplus to consumers.

Question 12

Figure 9-5  
-Refer to Figure 9-5.If the monopolist charges price P* for output Q*,in order to maximise profit or minimise loss in the short run,it should

Accepted Answer

A) continue to produce because price is greater than average variable cost. 
B) shut down because price is greater than marginal cost. 
C) shut down because price is less than average total cost. 
D) continue to produce because a monopolist always earns a profit. 
A) continue to produce because price is greater than average variable cost. 
B) shut down because price is greater than marginal cost. 
C) shut down because price is less than average total cost. 
D) continue to produce because a monopolist always earns a profit.

Question 13

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

Accepted Answer

Average revenue is equal to price for an

Question 14

What is the difference between price discrimination and other forms of discrimination?

Accepted Answer

Discrimination based on race or gender a

Question 15

Because a monopoly's demand curve is the same as the market demand curve for its product

Accepted Answer

A) the monopoly's marginal revenue equals its price. 
B) the monopoly is a price taker. 
C) the monopoly must lower its price to sell more of its product. 
D) the monopoly's average total cost always falls as it increases its output. 
A) the monopoly's marginal revenue equals its price. 
B) the monopoly is a price taker. 
C) the monopoly must lower its price to sell more of its product. 
D) the monopoly's average total cost always falls as it increases its output.

Question 16

Figure 9-15  
-Refer to Figure 9-15.What is the price charged under perfect price discrimination?

Accepted Answer

A) P3 
B) P4 
C) a range of prices corresponding to the demand curve from P3 and above 
D) a range of prices corresponding to the demand curve from P4 and above 
A) P3 
B) P4 
C) a range of prices corresponding to the demand curve from P3 and above 
D) a range of prices corresponding to the demand curve from P4 and above

Question 17

Figure 9-10  
-Refer to Figure 9-10.The deadweight loss due to a monopoly is represented by the area

Accepted Answer

A) FHE. 
B) FGE. 
C) GEH. 
D) FQ1Q2E. 
A) FHE. 
B) FGE. 
C) GEH. 
D) FQ1Q2E.

Question 18

Consider the following pricing strategies:
A.perfect price discrimination
B.charging different prices to different groups of customers
C.optimal two-part tariff
D.single-price monopoly pricing
Which of the pricing strategies leads to the economically efficient output level?

Accepted Answer

A) a only 
B) a and b only 
C) a and c only 
D) a,b,and c only 
A) a only 
B) a and b only 
C) a and c only 
D) a,b,and c only

Question 19

If a per-unit tax on output sold is imposed on a monopoly's product,the monopolist will increase its market price by the full amount of the tax.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a requirement for a successful price discrimination strategy?

Accepted Answer

A) A firm must have market power. 
B) The firm must be able to prevent consumers who buy a product at a low price from reselling it to other consumers at a high price. 
C) Managers must practice yield management. 
D) Some consumers must have greater willingness to pay for the product than other consumers,and the firm must be able to know what prices consumers are willing to pay. 
A) A firm must have market power. 
B) The firm must be able to prevent consumers who buy a product at a low price from reselling it to other consumers at a high price. 
C) Managers must practice yield management. 
D) Some consumers must have greater willingness to pay for the product than other consumers,and the firm must be able to know what prices consumers are willing to pay.

If a monopolist's price is $50 per unit and its marginal cost is $25,then

Which of the following products allows the seller to identify different groups of consumers (segment the market)at virtually no cost?

Wendell can sell five motor homes per week at a price of $22 000.If he lowers the price of motor homes to $20 000 per week he will sell six motor homes.What is the marginal revenue of the sixth motor home?

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements regarding economic surplus in each market structure is true?

Figure 9-2 Figure 9-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 9-2.The firm's profit-maximising price is

'Being the only seller in the market,the monopolist can choose any price and quantity it desires.' Evaluate this statement: Is it true or false? Explain your answer.

A firm that can effectively price discriminate will charge a higher price to

The term 'early adopters' refers to

Figure 9-3 Figure 9-3 above shows the demand and cost curves facing a monopolist. -Refer to Figure 9-3.Suppose the monopolist represented in the diagram above produces positive output.What is the profit-maximising/loss-minimising output level?

Figure 9-9 Figure 9-9 shows the demand and cost curves for a monopolist. -Refer to Figure 9-9.What is the difference between the monopoly output and the perfectly competitive output?

Yield management and price discrimination have enabled firms to increase profits and,at the same time,

Figure 9-5 -Refer to Figure 9-5.If the monopolist charges price P* for output Q*,in order to maximise profit or minimise loss in the short run,it should

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

What is the difference between price discrimination and other forms of discrimination?

Because a monopoly's demand curve is the same as the market demand curve for its product

Figure 9-15 -Refer to Figure 9-15.What is the price charged under perfect price discrimination?

Figure 9-10 -Refer to Figure 9-10.The deadweight loss due to a monopoly is represented by the area

Consider the following pricing strategies: A.perfect price discrimination B.charging different prices to different groups of customers C.optimal two-part tariff D.single-price monopoly pricing Which of the pricing strategies leads to the economically efficient output level?

If a per-unit tax on output sold is imposed on a monopoly's product,the monopolist will increase its market price by the full amount of the tax.

Which of the following is not a requirement for a successful price discrimination strategy?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

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Exam 9: Monopoly Markets

If a monopolist's price is $50 per unit and its marginal cost is $25,then

Which of the following products allows the seller to identify different groups of consumers (segment the market)at virtually no cost?

Wendell can sell five motor homes per week at a price of $22 000.If he lowers the price of motor homes to $20 000 per week he will sell six motor homes.What is the marginal revenue of the sixth motor home?

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements regarding economic surplus in each market structure is true?

Figure 9-2 Figure 9-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 9-2.The firm's profit-maximising price is

'Being the only seller in the market,the monopolist can choose any price and quantity it desires.' Evaluate this statement: Is it true or false? Explain your answer.

A firm that can effectively price discriminate will charge a higher price to

The term 'early adopters' refers to

Figure 9-3 Figure 9-3 above shows the demand and cost curves facing a monopolist. -Refer to Figure 9-3.Suppose the monopolist represented in the diagram above produces positive output.What is the profit-maximising/loss-minimising output level?

Figure 9-9 Figure 9-9 shows the demand and cost curves for a monopolist. -Refer to Figure 9-9.What is the difference between the monopoly output and the perfectly competitive output?

Yield management and price discrimination have enabled firms to increase profits and,at the same time,

Figure 9-5 -Refer to Figure 9-5.If the monopolist charges price P* for output Q*,in order to maximise profit or minimise loss in the short run,it should

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

What is the difference between price discrimination and other forms of discrimination?

Because a monopoly's demand curve is the same as the market demand curve for its product

Figure 9-15 -Refer to Figure 9-15.What is the price charged under perfect price discrimination?

Figure 9-10 -Refer to Figure 9-10.The deadweight loss due to a monopoly is represented by the area

Consider the following pricing strategies: A.perfect price discrimination B.charging different prices to different groups of customers C.optimal two-part tariff D.single-price monopoly pricing Which of the pricing strategies leads to the economically efficient output level?

If a per-unit tax on output sold is imposed on a monopoly's product,the monopolist will increase its market price by the full amount of the tax.

Which of the following is not a requirement for a successful price discrimination strategy?

Economics: Foundations and Models

Choices and Trade-Offs in the Market

Where Prices Come From: the Interaction of Demand and Supply

Elasticity: the Responsiveness of Demand and Supply

Economic Efficiency, Government Price Setting and Taxes

Consumer Choice and Behavioural Economics

Technology, Production and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition

Oligopoly: Firms in Less Competitive Markets

The Markets for Labour and Other Factors of Production

International Trade

Government Intervention in the Market

Externalities, Environmental Policy and Public Goods

The Distribution of Income and Social Policy

Filters