Question 1

A profit-maximizing monopolist that produces in the short run will:​

Accepted Answer

A) choose the output level where marginal revenue exceeds marginal cost by the largest amount. 
B) increase output as long as the marginal revenue exceeds the marginal cost of producing that unit. 
C) choose the output level where average total cost is at its minimum. 
D) increase price as long as average revenue exceeds average total cost. 
E) choose the output level where average revenue exceeds average total cost by the largest amount. 
A) choose the output level where marginal revenue exceeds marginal cost by the largest amount. 
B) increase output as long as the marginal revenue exceeds the marginal cost of producing that unit. 
C) choose the output level where average total cost is at its minimum. 
D) increase price as long as average revenue exceeds average total cost. 
E) choose the output level where average revenue exceeds average total cost by the largest amount. B

Question 2

Which of the following is true of a monopolist in the short run?​

Accepted Answer

A) It can charge whatever price it wants. 
B) It charges more than what consumers are willing to pay. 
C) It is constrained by marginal cost in setting price. 
D) It is constrained by consumer demand in setting price. 
E) It always earns an economic profit. 
A) It can charge whatever price it wants. 
B) It charges more than what consumers are willing to pay. 
C) It is constrained by marginal cost in setting price. 
D) It is constrained by consumer demand in setting price. 
E) It always earns an economic profit. D

Question 3

The true deadweight loss created by a monopolist that does not practice discrimination is most likely to be less than the loss indicated by the shaded area in the figure below, when:​ ​
Figure 9.11
​

Accepted Answer

A) the monopolist experiences diseconomies of scale. 
B) the monopolist charges lower prices to discourage competition. 
C) the monopolist engages in rent seeking. 
D) the monopolist advertises more to maintain its position. 
E) the monopolist faces diminishing marginal returns. 
A) the monopolist experiences diseconomies of scale. 
B) the monopolist charges lower prices to discourage competition. 
C) the monopolist engages in rent seeking. 
D) the monopolist advertises more to maintain its position. 
E) the monopolist faces diminishing marginal returns. B

Question 4

Which of the following equations describes the relationship between market price (P), average revenue (AR), and marginal revenue (MR) for a non-discriminating monopolist?​

Accepted Answer

A) P = AR = MR B) P > AR = MR C) P = AR > MR D) P > AR > MR E) P = AR < MR A) P = AR = MR B) P > AR = MR C) P = AR > MR D) P > AR > MR E) P = AR < MR

Question 5

Which of the following is observed when perfect price discrimination is practiced by a monopolist?​

Accepted Answer

A) Profit is lower than it would be without discrimination. 
B) Total revenue is lower than it would be without discrimination. 
C) Average revenue is less than average cost. 
D) Consumer surplus is zero. 
E) Profit is zero. 
A) Profit is lower than it would be without discrimination. 
B) Total revenue is lower than it would be without discrimination. 
C) Average revenue is less than average cost. 
D) Consumer surplus is zero. 
E) Profit is zero.

Question 6

For a monopolist, average revenue is:​

Accepted Answer

A) equal to marginal revenue at all output levels. 
B) greater than price at all output levels. 
C) less than price at all output levels. 
D) represented by a horizontal curve at all output levels. 
E) more than marginal revenue at all output levels. 
A) equal to marginal revenue at all output levels. 
B) greater than price at all output levels. 
C) less than price at all output levels. 
D) represented by a horizontal curve at all output levels. 
E) more than marginal revenue at all output levels.

Question 7

Monopolists always earn positive short-run economic profit.​

Accepted Answer

A) True 
 B)False

Question 8

The demand curve a monopolist uses in making an output decision is:​

Accepted Answer

A) the same as the demand curve facing a perfectly competitive firm. 
B) positively sloped as it produces a highly differentiated product. 
C) vertical as there are no close substitutes for its product. 
D) the same as the market demand curve. 
E) perfectly price inelastic. 
A) the same as the demand curve facing a perfectly competitive firm. 
B) positively sloped as it produces a highly differentiated product. 
C) vertical as there are no close substitutes for its product. 
D) the same as the market demand curve. 
E) perfectly price inelastic.

Question 9

Identify a distinguishing feature of monopoly.​

Accepted Answer

A) There are no barriers to entry in a monopolized market. 
B) A monopolist is a price taker. 
C) There are no close substitutes for a monopolist's product. 
D) There are many firms in a monopolized industry. 
E) A monopolist faces a horizontal demand curve. 
A) There are no barriers to entry in a monopolized market. 
B) A monopolist is a price taker. 
C) There are no close substitutes for a monopolist's product. 
D) There are many firms in a monopolized industry. 
E) A monopolist faces a horizontal demand curve.

Question 10

A monopolist's demand curve is:​

Accepted Answer

A) its marginal cost curve. 
B) its marginal revenue curve. 
C) identical to its market demand curve. 
D) the same as the demand curve faced by a firm in perfect competition. 
E) the same as its average cost curve. 
A) its marginal cost curve. 
B) its marginal revenue curve. 
C) identical to its market demand curve. 
D) the same as the demand curve faced by a firm in perfect competition. 
E) the same as its average cost curve.

Question 11

A natural monopoly emerges from legal restrictions imposed by a government.​

Accepted Answer

A) True 
 B)False

Question 12

If the marginal cost curve shifts upward, a profit-maximizing monopolist that does not practice price discrimination is likely to respond in the short run by:​

Accepted Answer

A) raising price and increasing output. 
B) raising price and decreasing output. 
C) keeping price constant and increasing output. 
D) reducing price and increasing output. 
E) shutting down. 
A) raising price and increasing output. 
B) raising price and decreasing output. 
C) keeping price constant and increasing output. 
D) reducing price and increasing output. 
E) shutting down.

Question 13

According to the information provided in the table below, marginal revenue from the sixth unit of output is:​ ​
Table 9.1
​

Accepted Answer

A) $10. 
B) $60. 
C) $100. 
D) $40. 
E) ‒$40. 
A) $10. 
B) $60. 
C) $100. 
D) $40. 
E) ‒$40.

Question 14

The figure below shows the cost and revenue curves for a monopolist. If the monopolist chooses to produce 1,000 units and does not discriminate among its customers, its total profit will be _____.​ ​
Figure 9.6
​

Accepted Answer

A) $0 
B) $104,000 
C) $212,000 
D) maximized 
E) negative 
A) $0 
B) $104,000 
C) $212,000 
D) maximized 
E) negative

Question 15

According to the information provided in the table below, marginal revenue from the third unit of output is:​ ​
Table 9.1
​
​

Accepted Answer

A) $20. 
B) $120. 
C) $100. 
D) $40. 
E) $0. 
A) $20. 
B) $120. 
C) $100. 
D) $40. 
E) $0.

Question 16

The practice of charging different prices to different consumers for the same product is called:​

Accepted Answer

A) arbitration. 
B) unit pricing. 
C) price discrimination. 
D) predatory pricing. 
E) marginal cost pricing. 
A) arbitration. 
B) unit pricing. 
C) price discrimination. 
D) predatory pricing. 
E) marginal cost pricing.

Question 17

Suppose a monopolist must choose between two points on its demand curve. It can either sell 100 units for $3 each or sell 140 units for $2 each. Which of the following is true?​

Accepted Answer

A) The demand for the monopolist's product is price elastic for the given range of output. 
B) The demand for the monopolist's product is unit elastic for the given range of output. 
C) The demand for the monopolist's product is price inelastic for the given range of output. 
D) The monopolist is facing a horizontal supply curve. 
E) The monopolist is facing an upward-rising demand curve. 
A) The demand for the monopolist's product is price elastic for the given range of output. 
B) The demand for the monopolist's product is unit elastic for the given range of output. 
C) The demand for the monopolist's product is price inelastic for the given range of output. 
D) The monopolist is facing a horizontal supply curve. 
E) The monopolist is facing an upward-rising demand curve.

Question 18

A natural monopoly forms when a firm has:​

Accepted Answer

A) a license. 
B) a patent. 
C) a U-shaped long-run average cost curve. 
D) a downward-sloping long-run average cost curve. 
E) a right to exclusively use a natural resource. 
A) a license. 
B) a patent. 
C) a U-shaped long-run average cost curve. 
D) a downward-sloping long-run average cost curve. 
E) a right to exclusively use a natural resource.

Question 19

The figure below shows the cost and revenue curves for a non-discriminating monopolist. The profit-maximizing output and price for a monopolist are:​ ​
Figure 9.2

Accepted Answer

A) 90 units and $18, respectively. 
B) 1,500 units and $24, respectively. 
C) 1,700 units and $22, respectively. 
D) 1,100 units and $28, respectively. 
E) 1,500 units and $22, respectively. 
A) 90 units and $18, respectively. 
B) 1,500 units and $24, respectively. 
C) 1,700 units and $22, respectively. 
D) 1,100 units and $28, respectively. 
E) 1,500 units and $22, respectively.

Question 20

Which of the following is true for both perfect competition and monopoly?​

Accepted Answer

A) Firms produce a differentiated product. 
B) Firms cannot earn economic profit in the long run. 
C) Individual firms have no ability to control the price of their output but must accept the market price. 
D) Firms go out of business in the long run if total revenue cannot cover total cost. 
E) Firms usually earn economic profit in the long run. 
A) Firms produce a differentiated product. 
B) Firms cannot earn economic profit in the long run. 
C) Individual firms have no ability to control the price of their output but must accept the market price. 
D) Firms go out of business in the long run if total revenue cannot cover total cost. 
E) Firms usually earn economic profit in the long run.

Exam 9: Monopoly

A profit-maximizing monopolist that produces in the short run will:​

Which of the following is true of a monopolist in the short run?​

The true deadweight loss created by a monopolist that does not practice discrimination is most likely to be less than the loss indicated by the shaded area in the figure below, when:​ ​ Figure 9.11 ​

Which of the following equations describes the relationship between market price (P), average revenue (AR), and marginal revenue (MR) for a non-discriminating monopolist?​

Which of the following is observed when perfect price discrimination is practiced by a monopolist?​

For a monopolist, average revenue is:​

Monopolists always earn positive short-run economic profit.​

The demand curve a monopolist uses in making an output decision is:​

Identify a distinguishing feature of monopoly.​

A monopolist's demand curve is:​

A natural monopoly emerges from legal restrictions imposed by a government.​

If the marginal cost curve shifts upward, a profit-maximizing monopolist that does not practice price discrimination is likely to respond in the short run by:​

According to the information provided in the table below, marginal revenue from the sixth unit of output is:​ ​ Table 9.1 ​

The figure below shows the cost and revenue curves for a monopolist. If the monopolist chooses to produce 1,000 units and does not discriminate among its customers, its total profit will be _____.​ ​ Figure 9.6 ​

According to the information provided in the table below, marginal revenue from the third unit of output is:​ ​ Table 9.1 ​ ​

The practice of charging different prices to different consumers for the same product is called:​

Suppose a monopolist must choose between two points on its demand curve. It can either sell 100 units for $3 each or sell 140 units for $2 each. Which of the following is true?​

A natural monopoly forms when a firm has:​

The figure below shows the cost and revenue curves for a non-discriminating monopolist. The profit-maximizing output and price for a monopolist are:​ ​ Figure 9.2

Which of the following is true for both perfect competition and monopoly?​

The Art and Science of Economic Analysis

Economic Tools and Economic Systems

Economic Decision Makers

Demand, Supply, and Markets

Elasticity of Demand and Supply

Consumer Choice and Demand

Production and Cost in the Firm

Perfect Competition

Monopolistic Competition and Oligopoly

Resource Markets

Labor Markets and Labor Unions

Capital, Interest, Entrepreneurship, and Corporate Finance

Transaction Costs, Asymmetric Information, and Behavioral Economics

Economic Regulation and Antitrust Policy

Public Goods and Public Choice

Externalities and the Environment

Poverty and Redistribution

International Trade

International Finance

Economic Development

Filters

A profit-maximizing monopolist that produces in the short run will:

Which of the following is true of a monopolist in the short run?

The true deadweight loss created by a monopolist that does not practice discrimination is most likely to be less than the loss indicated by the shaded area in the figure below, when: Figure 9.11

Which of the following equations describes the relationship between market price (P), average revenue (AR), and marginal revenue (MR) for a non-discriminating monopolist?

Which of the following is observed when perfect price discrimination is practiced by a monopolist?

For a monopolist, average revenue is:

Monopolists always earn positive short-run economic profit.

The demand curve a monopolist uses in making an output decision is:

Identify a distinguishing feature of monopoly.

A monopolist's demand curve is:

A natural monopoly emerges from legal restrictions imposed by a government.

If the marginal cost curve shifts upward, a profit-maximizing monopolist that does not practice price discrimination is likely to respond in the short run by:

According to the information provided in the table below, marginal revenue from the sixth unit of output is: Table 9.1

The figure below shows the cost and revenue curves for a monopolist. If the monopolist chooses to produce 1,000 units and does not discriminate among its customers, its total profit will be _____. Figure 9.6

According to the information provided in the table below, marginal revenue from the third unit of output is: Table 9.1

The practice of charging different prices to different consumers for the same product is called:

Suppose a monopolist must choose between two points on its demand curve. It can either sell 100 units for $3 each or sell 140 units for $2 each. Which of the following is true?

A natural monopoly forms when a firm has:

The figure below shows the cost and revenue curves for a non-discriminating monopolist. The profit-maximizing output and price for a monopolist are: Figure 9.2

Which of the following is true for both perfect competition and monopoly?