Question 1

The following figure shows revenue and cost curves of a monopolist. Figure 24.8 3P2AC. E) the area P3P4DC." class="answers-bank-image d-inline" rel="preload" > AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
According to Figure 24.7, the deadweight loss of monopoly is:

Accepted Answer

A)  the area ABC.
B)  the area BCD.
C)  the area ACD.
D)  the area P3P2AC.
E)  the area P3P4DC.F) B) and C)
G) A) and E)

Question 2

Barriers to entry do not occur when:

Accepted Answer

A)  economies of scale in production exist in an industry.
B)  the government requires a professional license or franchise agreement.
C)  the firm that introduces a product is granted a patent.
D)  a firm controls a scarce resource.
E)  diseconomies of scale in production exist in an industry.F) A) and E)
G) B) and E)

Question 3

The following figure shows revenue and cost curves of a monopolist. Figure 24.8 4. C) P3. D) P2. E) P1." class="answers-bank-image d-inline" rel="preload" > AR: Average revenue curve
MR: Marginal revenue curve
MC: Marginal cost curve
According to Figure 24.7, the profit maximizing price of the monopolist is:

Accepted Answer

A)  0.
B)  P4.
C)  P3.
D)  P2.
E)  P1.F) C) and E)
G) C) and D)

Question 4

The ability of a firm to charge different customers different prices is called _____:

Accepted Answer

A)  price ceiling.
B)  price discrimination.
C)  predatory pricing.
D)  price flooring.
E)  basing point pricing.F) B) and D)
G) All of the above

Question 5

By discriminating between the consumers, the monopolist actually takes away a portion of the consumer surplus.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a necessary condition for price discrimination?

Accepted Answer

A)  The firm must be a price maker.
B)  The firm must be able to distinguish between customers.
C)  The firm must be able to prevent resale between customers.
D)  The firm must be able to product homogenous products.
E)  The firm must be facing a downward-sloping demand curve.F) D) and E)
G) All of the above

Question 7

The following figures show the demand and cost curves of a perfectly competitive and a monopoly firm respectively. Figure 24.7 2ACP1 B) The area ABC C) The area P2ABP1 D) The distance AB E) There is no deadweight loss" class="answers-bank-image d-inline" rel="preload" > D: Average Revenue
AC: Average cost
MC: Marginal cost
MR: Marginal cost
Calculate the deadweight loss in Figure 24.6, if the perfectly competitive industry is monopolized after it had been producing an output of 10, 000 units?

Accepted Answer

A)  The area P2ACP1
B)  The area ABC
C)  The area P2ABP1
D)  The distance AB
E)  There is no deadweight lossF) B) and E)
G) A) and E)

Question 8

Perfect competition provides one model in which there are many firms with no barriers to entry.If perfect competition as a model lies on one extreme, the model that lies on the opposite extreme is:

Accepted Answer

A)  monopolistic competition.
B)  oligopoly.
C)  monopoly.
D)  imperfect competition.
E)  oligopolistic competition.F) B) and E)
G) D) and E)

Question 9

A monopolist earns only normal profits in the long run.

Accepted Answer

A) True 
 B)False

Question 10

Grocery store coupons, mail-in rebates, senior discounts, and in-state versus out-of-state tuition fees are all examples of:

Accepted Answer

A)  government intervention.
B)  price neutrality.
C)  arbitrage pricing.
D)  price discrimination.
E)  illegal business practice.F) C) and D)
G) B) and E)

Question 11

The figure given below shows the demand curves of two classes of buyers for tickets to a football match. Figure 24.4 1: Demand curve of group 1 D2: Demand curve of group 2 MR1: Marginal revenue of group 1 MR2: Marginal revenue of group 2 MC: Marginal cost In Figure 24.4, the demand curve D2: A) has a price elasticity of demand greater than 1. B) is relatively less price elastic than D1. C) is the inverse of the demand curve D1. D) has a price elasticity of demand less than 1. E) represents the demand of the group that is more responsive to price changes." class="answers-bank-image d-inline" rel="preload" > D1: Demand curve of group 1
D2: Demand curve of group 2
MR1: Marginal revenue of group 1
MR2: Marginal revenue of group 2
MC: Marginal cost
In Figure 24.4, the demand curve D2:

Accepted Answer

A)  has a price elasticity of demand greater than 1.
B)  is relatively less price elastic than D1.
C)  is the inverse of the demand curve D1.
D)  has a price elasticity of demand less than 1.
E)  represents the demand of the group that is more responsive to price changes.F) C) and D)
G) B) and E)

Question 12

The following table shows the marginal revenues earned by a price discriminating monopolist from two different markets. Table 24.4
 Refer to Table 24.4.If marginal cost is $30 in both markets, what quantities will be supplied in each of the markets?

Accepted Answer

A)  4 units in market X;1 unit in market Y
B)  4 units in market X;2 units in market Y
C)  2 units in market X;3 units in market Y
D)  3 units in market X;3 units in market Y
E)  3 units in market X;nothing in market YF) B) and C)
G) A) and D)

Question 13

A clothing store can sell two shirts for $20 each or three shirts for $18 each.At a quantity of three shirts sold, marginal revenue is _____.

Accepted Answer

A)  $18
B)  $14
C)  $54
D)  $20
E)  $44F) B) and E)
G) B) and D)

Question 14

If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is $6, and marginal cost is $4, then the monopolist:

Accepted Answer

A)  is in equilibrium.
B)  should increase output.
C)  should reduce output.
D)  should lower the price at the current output level.
E)  should raise the price at the current output level.F) A) and C)
G) A) and E)

Question 15

Which of the following statements is true?

Accepted Answer

A)  A perfectly competitive firm's demand curve is the market-demand curve.
B)  For a monopolist, the demand curve faced by a monopolist is more elastic than the one faced by a competitive firm.
C)  For a monopolist, the law of demand generally does not apply because it is the only firm in a market.
D)  A monopolist's demand curve is the market-demand curve.
E)  The demand curve faced by a monopolist is flatter than the market demand curve.F) None of the above
G) A) and E)

Question 16

If a firm has a perfectly elastic demand curve, then:

Accepted Answer

A)  it must be a monopoly firm.
B)  it can charge any price it desires.
C)  the firm has significant market power.
D)  the firm has no market power.
E)  the firm should shut down.F) A) and E)
G) C) and D)

Question 17

If a firm is able to collect the entire producer surplus, it is said to have practiced perfect price discrimination.

Accepted Answer

A) True 
 B)False

Question 18

If an industry experiences economies of scale in production, then entry into the market by other firms is easy.

Accepted Answer

A) True 
 B)False

Exam 45: Monopoly

If an industry experiences economies of scale in production, then entry into the market by other firms is easy.

Correct Answer
verified

If a firm has a perfectly elastic demand curve, then:

Correct Answer
verified

Correct Answer
verified

If a firm is able to collect the entire producer surplus, it is said to have practiced perfect price discrimination.

Correct Answer
verified

If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is $6, and marginal cost is $4, then the monopolist:

Correct Answer
verified

By discriminating between the consumers, the monopolist actually takes away a portion of the consumer surplus.

Correct Answer
verified

A clothing store can sell two shirts for $20 each or three shirts for $18 each.At a quantity of three shirts sold, marginal revenue is _____.

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Which of the following is not a necessary condition for price discrimination?

Correct Answer
verified

Barriers to entry do not occur when:

Correct Answer
verified

The following figure shows revenue and cost curves of a monopolist. Figure 24.8 AR: Average revenue curve MR: Marginal revenue curve MC: Marginal cost curve According to Figure 24.7, the profit maximizing price of the monopolist is:

Correct Answer
verified

A monopolist earns only normal profits in the long run.

Correct Answer
verified

Grocery store coupons, mail-in rebates, senior discounts, and in-state versus out-of-state tuition fees are all examples of:

Correct Answer
verified

The ability of a firm to charge different customers different prices is called _____:

Correct Answer
verified

Perfect competition provides one model in which there are many firms with no barriers to entry.If perfect competition as a model lies on one extreme, the model that lies on the opposite extreme is:

Correct Answer
verified

The following table shows the marginal revenues earned by a price discriminating monopolist from two different markets. Table 24.4 Refer to Table 24.4.If marginal cost is $30 in both markets, what quantities will be supplied in each of the markets?

Correct Answer
verified

The following figure shows revenue and cost curves of a monopolist. Figure 24.8 AR: Average revenue curve MR: Marginal revenue curve MC: Marginal cost curve According to Figure 24.7, the deadweight loss of monopoly is:

Correct Answer
verified

Correct Answer
verified

Exam 45: Monopoly

If an industry experiences economies of scale in production, then entry into the market by other firms is easy.

Correct AnswerverifiedShow Answer

If a firm has a perfectly elastic demand curve, then:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a firm is able to collect the entire producer surplus, it is said to have practiced perfect price discrimination.

Correct AnswerverifiedShow Answer

If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is $6, and marginal cost is $4, then the monopolist:

Correct AnswerverifiedShow Answer

By discriminating between the consumers, the monopolist actually takes away a portion of the consumer surplus.

Correct AnswerverifiedShow Answer

A clothing store can sell two shirts for $20 each or three shirts for $18 each.At a quantity of three shirts sold, marginal revenue is _____.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Which of the following is not a necessary condition for price discrimination?

Correct AnswerverifiedShow Answer

Barriers to entry do not occur when:

Correct AnswerverifiedShow Answer

The following figure shows revenue and cost curves of a monopolist. Figure 24.8 AR: Average revenue curve MR: Marginal revenue curve MC: Marginal cost curve According to Figure 24.7, the profit maximizing price of the monopolist is:

Correct AnswerverifiedShow Answer

A monopolist earns only normal profits in the long run.

Correct AnswerverifiedShow Answer

Grocery store coupons, mail-in rebates, senior discounts, and in-state versus out-of-state tuition fees are all examples of:

Correct AnswerverifiedShow Answer

The ability of a firm to charge different customers different prices is called _____:

Correct AnswerverifiedShow Answer

Perfect competition provides one model in which there are many firms with no barriers to entry.If perfect competition as a model lies on one extreme, the model that lies on the opposite extreme is:

Correct AnswerverifiedShow Answer

The following table shows the marginal revenues earned by a price discriminating monopolist from two different markets. Table 24.4 Refer to Table 24.4.If marginal cost is $30 in both markets, what quantities will be supplied in each of the markets?

Correct AnswerverifiedShow Answer

The following figure shows revenue and cost curves of a monopolist. Figure 24.8 AR: Average revenue curve MR: Marginal revenue curve MC: Marginal cost curve According to Figure 24.7, the deadweight loss of monopoly is:

Correct AnswerverifiedShow Answer

The figure given below shows the demand curves of two classes of buyers for tickets to a football match. Figure 24.4 D1: Demand curve of group 1 D2: Demand curve of group 2 MR1: Marginal revenue of group 1 MR2: Marginal revenue of group 2 MC: Marginal cost In Figure 24.4, the demand curve D2:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified