Question 1

Answer the question on the basis of the following information for a pure monopolist:   Output  Total Cost 0$25012602290335044805700 Product  Price $500300250200150100\begin{array}{ccc}\begin{array}{ccc}\	ext { Output } & & 	ext { Total Cost } \\hline0 & & \$ 250 \1 & & 260 \2 & & 290 \3 & & 350 \4 & & 480 \5 & & 700\end{array}\begin{array}{l}	ext { Product }\\begin{array}{c}	ext { Price } \\hline \$ 500 \300 \250 \200 \150 \100\end{array}\end{array}\end{array} Output 012345​​ Total Cost $250260290350480700​​ Product  Price $500300250200150100​​​​  How many units would the given profit-maximizing nondiscriminating monopolist produce?

Accepted Answer

A)   1.
B)   2.
C)   3.
D)   4.

Question 2

(Last Word) The U.S.Internet search market:

Accepted Answer

A)   is best characterized by pure competition.
B)   is dominated by Google,which controls about 70 percent of the market.
C)   has a few prominent firms that each possesses a relatively equal market share.
D)   has no barriers to entry.

Question 3

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

Accepted Answer

A) True 
 B)False

Question 4

Pure monopolists always earn economic profits.

Accepted Answer

A) True 
 B)False

Question 5

In the short run a pure monopolist will charge the highest price the market will bear for its product.

Accepted Answer

A) True 
 B)False

Question 6

A nondiscriminating profit-maximizing monopolist:

Accepted Answer

A)   will never produce in the output range where marginal revenue is positive.
B)   will never produce in the output range where demand is inelastic.
C)   will never produce in the output range where demand is elastic.
D)   may produce where demand is either elastic or inelastic,depending on the level of production costs.

Question 7

Which of the following is incorrect? Imperfectly competitive producers:

Accepted Answer

A)   face downsloping demand curves.
B)   do not compete with one another.
C)   can alter their output by changing price.
D)   find that,when they reduce price,their total revenue increases by less than the new price.

Question 8

Which of the following is not a possible source of natural monopoly?

Accepted Answer

A)   Large-scale network effects.
B)   Simultaneous consumption.
C)   Greater use of specialized inputs.
D)   Rent-seeking behavior.

Question 9

If a pure monopolist is producing more output than the MR = MC output:

Accepted Answer

A)   the firm may,or may not,be maximizing profits.
B)   it will be in the interest of the firm,but not necessarily of society,to reduce output.
C)   it will be in the interest of the firm and society to increase output.
D)   it will be in the interest of the firm and society to reduce output.

Question 10

The pure monopolist's demand curve is relatively elastic:

Accepted Answer

A)   in the price range where total revenue is declining.
B)   at all points where the demand curve lies above the horizontal axis.
C)   in the price range where marginal revenue is negative.
D)   in the price range where marginal revenue is positive.

Question 11

Answer the question on the basis of the following information for a pure monopolist:   Output  Total Cost 0$25012602290335044805700 Product  Price $500300250200150100\begin{array}{ccc}\begin{array}{ccc}\	ext { Output } & & 	ext { Total Cost } \\hline0 & & \$ 250 \1 & & 260 \2 & & 290 \3 & & 350 \4 & & 480 \5 & & 700\end{array}\begin{array}{l}	ext { Product }\\begin{array}{c}	ext { Price } \\hline \$ 500 \300 \250 \200 \150 \100\end{array}\end{array}\end{array} Output 012345​​ Total Cost $250260290350480700​​ Product  Price $500300250200150100​​​​  At its profit-maximizing output,the given nondiscriminating monopolist:

Accepted Answer

A)   incurs a loss.
B)   earns an economic profit of $250.
C)   earns a normal profit of $250.
D)   earns an economic profit of $150.

Question 12

If a pure monopolist can price discriminate by separating buyers into two or more groups:

Accepted Answer

A)   the marginal revenue curve and the total revenue curve will now coincide.
B)   the marginal revenue curve will now shift to a position above the demand curve.
C)   the firm will face multiple marginal revenue curves.
D)   marginal revenue will become less at each level of output than it would be without price discrimination.

Question 13

Price discrimination is illegal in the United States under antitrust regulations.

Accepted Answer

A) True 
 B)False

Question 14

If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.

Accepted Answer

A) True 
 B)False

Question 15

Price discrimination is:

Accepted Answer

A)   always legal.
B)   always illegal.
C)   only illegal if it hurts consumers more than nondiscrimination.
D)   only illegal if used to lessen or eliminate competition.

Question 16

In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum.

Accepted Answer

A) True 
 B)False

Question 17

If a monopolist were to produce in the inelastic segment of its demand curve:

Accepted Answer

A)   total revenue would be at a maximum.
B)   marginal revenue would be positive.
C)   the firm would not be maximizing profits.
D)   it would necessarily incur a loss.

Question 18

The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

Accepted Answer

A)   the quantity demanded.
B)   product price and marginal revenue.
C)   total revenue.
D)   product price and average revenue.

Question 19

Price discrimination refers to:

Accepted Answer

A)   selling a given product for different prices at two different points in time.
B)   any price above that which is equal to a minimum average total cost.
C)   the selling of a given product at different prices to different customers that do not reflect cost differences.
D)   the difference between the prices a purely competitive seller and a purely monopolistic seller would charge.

Exam 12: Pure Monopoly

Price discrimination is:

Correct Answer
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The pure monopolist's demand curve is relatively elastic:

Correct Answer
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Price discrimination is illegal in the United States under antitrust regulations.

Correct Answer
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Price discrimination refers to:

Correct Answer
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In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum.

Correct Answer
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Which of the following is incorrect? Imperfectly competitive producers:

Correct Answer
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If a pure monopolist is producing more output than the MR = MC output:

Correct Answer
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A nondiscriminating profit-maximizing monopolist:

Correct Answer
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The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

Correct Answer
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If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.

Correct Answer
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If a pure monopolist can price discriminate by separating buyers into two or more groups:

Correct Answer
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A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

Correct Answer
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If a monopolist were to produce in the inelastic segment of its demand curve:

Correct Answer
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Pure monopolists always earn economic profits.

Correct Answer
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In the short run a pure monopolist will charge the highest price the market will bear for its product.

Correct Answer
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(Last Word) The U.S.Internet search market:

Correct Answer
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Which of the following is not a possible source of natural monopoly?

Correct Answer
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Correct Answer
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Exam 12: Pure Monopoly

Price discrimination is:

Correct AnswerverifiedShow Answer

The pure monopolist's demand curve is relatively elastic:

Correct AnswerverifiedShow Answer

Price discrimination is illegal in the United States under antitrust regulations.

Correct AnswerverifiedShow Answer

Price discrimination refers to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the short run a pure monopolist will maximize profits by producing at that level of output where the difference between price and average total cost is at a maximum.

Correct AnswerverifiedShow Answer

Which of the following is incorrect? Imperfectly competitive producers:

Correct AnswerverifiedShow Answer

If a pure monopolist is producing more output than the MR = MC output:

Correct AnswerverifiedShow Answer

A nondiscriminating profit-maximizing monopolist:

Correct AnswerverifiedShow Answer

The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist's demand curve measures:

Correct AnswerverifiedShow Answer

If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit,the marginal revenue of the fifth unit is $5.

Correct AnswerverifiedShow Answer

If a pure monopolist can price discriminate by separating buyers into two or more groups:

Correct AnswerverifiedShow Answer

A pure monopolist will maximize profits by producing at that output where price and marginal cost are equal.

Correct AnswerverifiedShow Answer

If a monopolist were to produce in the inelastic segment of its demand curve:

Correct AnswerverifiedShow Answer

Pure monopolists always earn economic profits.

Correct AnswerverifiedShow Answer

In the short run a pure monopolist will charge the highest price the market will bear for its product.

Correct AnswerverifiedShow Answer

(Last Word) The U.S.Internet search market:

Correct AnswerverifiedShow Answer

Which of the following is not a possible source of natural monopoly?

Correct AnswerverifiedShow Answer

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