Question 1

A profit-maximizing monopolist earns an economic loss whenever

Accepted Answer

A)  it pays taxes to the government on each unit of output it produces.
B)  the price it charges for its product exceeds average total cost.
C)  the demand curve lies completely below the ATC curve.
D)  it produces along the elastic portion of a demand curve.

Question 2

To be able to engage in profit-maximizing price searching,a monopoly firm must be able to

Accepted Answer

A)  prevent the entry of other firms into the market for its product.
B)  induce the entry of other firms into the market for its product.
C)  avoid earning negative economic profits in the short run.
D)  always earn zero economic profits.

Question 3

If a monopolist produces to a point at which marginal revenue is more than marginal cost then

Accepted Answer

A)  the firm should increase output.
B)  the firm should reduce output.
C)  the firm is maximizing profits.
D)  we do not know if the firm should increase or reduce without more information.

Question 4

1 units at a price P1,the firm should A) increase output and decrease price. B) decrease output and increase price. C) not change output or price. D) shut down." class="answers-bank-image d-inline" rel="preload" >
-In the above figure,if the firm is producing Q1 units at a price P1,the firm should

Accepted Answer

A)  increase output and decrease price.
B)  decrease output and increase price.
C)  not change output or price.
D)  shut down.

Question 5

A patent provides legal protection for an invention for

Accepted Answer

A)  20 years.
B)  9 years.
C)  5 years.
D)  3 years.

Question 6

Suppose that the profit maximizing level of output for the monopolist is 100 units,and ATC = $45.00; MC = $35.00; MR = $35.00; P = $45.00.What is the monopoly's profit?

Accepted Answer

A)  -$1000
B)  $4500
C)  $0
D)  $3500

Question 7

In a perfectly competitive market,if all firms face identical,constant marginal marginal cost curves,then consumer surplus is

Accepted Answer

A)  the area beneath the market demand curve and above the market clearing price.
B)  the area above the market demand curve and above the market clearing price.
C)  the total area beneath the market demand curve.
D)  definitely zero.

Question 8

Compared to an efficient perfectly competitive industry,the monopolist will

Accepted Answer

A)  produce less output at a higher total cost.
B)  produce less output and charge a higher price.
C)  produce more output at a higher price and higher profit.
D)  produce more output at a lower price.

Question 9

-Refer to the above figure.The profit-maximizing price and output for this monopolist are

Accepted Answer

A)  a price of  P1P _ { 1 }P1​  and output of Q1\mathrm { Q } _ { 1 }Q1​  .
B)  a price of  P4\mathrm { P } _ { 4 }P4​  and output of O1\mathrm { O } _ { 1 }O1​  .
C)  a price of  P2P _ { 2 }P2​  and output of Q2\mathrm { Q } _ { 2 }Q2​  .
D)  a price of  P3\mathrm { P } _ { 3 }P3​  and output of Q3\mathrm { Q } _ { 3 }Q3​  .

Question 10

Which of the following statements is TRUE?

Accepted Answer

A)  At the monopolist's equilibrium,resources are being efficiently allocated.
B)  With a monopoly,the value to society of the last unit produced is less than it's production cost.
C)  Monopolists raise the price and restrict production,compared to a competitive situation.
D)  A monopolist always produces a higher level of output than would be produced if the market were competitive.

Question 11

-Refer to the above figure.The long-run average cost curve and the long-run marginal cost curves represent

Accepted Answer

A)  the cost curves for a competitive firm.
B)  the cost curves for a natural monopoly.
C)  a situation where a firm has control over the raw materials.
D)  a situation where a firm has a patent.

Question 12

When grocery stores issue special discount membership cards for shoppers effectively offering different prices based on quantities consumed,this is an example of

Accepted Answer

A)  price discrimination.
B)  price differentiation.
C)  product differentiation.
D)  patent protection.

Question 13

Which of the following would NOT be a barrier to entry for a particular market?

Accepted Answer

A)  Ownership of a patent
B)  Low cost of obtaining initial capital
C)  The presence of economies of scale
D)  Government regulation

Question 14

Barriers to entry enable many monopolists to

Accepted Answer

A)  charge as high a price as they want.
B)  make people buy more of a good than they really want.
C)  earn economic profits in the long run.
D)  manipulate the government into providing special favors for themselves.

Question 15

A patent on a product gives a firm

Accepted Answer

A)  protection from having the invention copied or stolen for a period of 20 years.
B)  economies of scale in producing the product.
C)  excessive profits in the long run.
D)  the power to impose a tariff on a competing product.

Question 16

Suppose that a drug for treating cancer is cleared by the Food and Drug Administration and that the company is successful in obtaining a patent for its product.Which of the following is then true?

Accepted Answer

A)  The patent holder now faces barriers to entry.
B)  The method of producing the product would not be considered intellectual property.
C)  The patent holder has a monopoly.
D)  The drug would have many close substitutes.

Question 17

A monopolist is defined as

Accepted Answer

A)  a firm with annual sales over $10 million.
B)  a large firm,making substantial profits,that is able to make other firms do what it wants.
C)  a single supplier of a good or service for which there is no close substitute.
D)  a producer of a good or service that is expensive to produce,requiring large amounts of capital equipment.

Question 18

Which of the following are barriers to entry?

Accepted Answer

A)  Economies of scale
B)  Patents and copyrights
C)  Control of resources
D)  All of the above

Question 19

A monopolist produces in the elastic segment of its demand curve because when it lowers the price,

Accepted Answer

A)  the percentage change increase in quantity demanded is greater than the percentage change decrease in price and total revenue increases.
B)  the percentage change increase in quantity demanded is less than the percentage change decrease in price and total revenue increases.
C)  the percentage change increase in quantity demanded is greater than the percentage change decrease in price and total revenue decreases.
D)  the percentage change decrease in quantity demanded is less than the percentage change decrease in price and total revenue increases.

Question 20

Quantity 	ext { Quantity } Quantity  
-Use the above figure.The profit-maximizing output will be

Accepted Answer

A)    Q1\mathrm { Q } _ { 1 }Q1​  .
B)    Q2\mathrm { Q } _ { 2 }Q2​  .
C)    Q3\mathrm { Q } _ { 3 }Q3​  .
D)  None of the above are correct.

Exam 11: Monopoly

Which of the following would NOT be a barrier to entry for a particular market?

Correct Answer
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Which of the following statements is TRUE?

Correct Answer
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A monopolist produces in the elastic segment of its demand curve because when it lowers the price,

Correct Answer
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$\text { Quantity }$ -Use the above figure.The profit-maximizing output will be

Correct Answer
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Barriers to entry enable many monopolists to

Correct Answer
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Which of the following are barriers to entry?

Correct Answer
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To be able to engage in profit-maximizing price searching,a monopoly firm must be able to

Correct Answer
verified

When grocery stores issue special discount membership cards for shoppers effectively offering different prices based on quantities consumed,this is an example of

Correct Answer
verified

Compared to an efficient perfectly competitive industry,the monopolist will

Correct Answer
verified

Correct Answer
verified

Suppose that the profit maximizing level of output for the monopolist is 100 units,and ATC = $45.00; MC = $35.00; MR = $35.00; P = $45.00.What is the monopoly's profit?

Correct Answer
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-In the above figure,if the firm is producing Q₁ units at a price P₁,the firm should

Correct Answer
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If a monopolist produces to a point at which marginal revenue is more than marginal cost then

Correct Answer
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A monopolist is defined as

Correct Answer
verified

A patent provides legal protection for an invention for

Correct Answer
verified

A patent on a product gives a firm

Correct Answer
verified

A profit-maximizing monopolist earns an economic loss whenever

Correct Answer
verified

Suppose that a drug for treating cancer is cleared by the Food and Drug Administration and that the company is successful in obtaining a patent for its product.Which of the following is then true?

Correct Answer
verified

In a perfectly competitive market,if all firms face identical,constant marginal marginal cost curves,then consumer surplus is

Correct Answer
verified

-Refer to the above figure.The long-run average cost curve and the long-run marginal cost curves represent

Correct Answer
verified

Exam 11: Monopoly

Which of the following would NOT be a barrier to entry for a particular market?

Correct AnswerverifiedShow Answer

Which of the following statements is TRUE?

Correct AnswerverifiedShow Answer

A monopolist produces in the elastic segment of its demand curve because when it lowers the price,

Correct AnswerverifiedShow Answer

Quantity \text { Quantity } Quantity -Use the above figure.The profit-maximizing output will be

Correct AnswerverifiedShow Answer

Barriers to entry enable many monopolists to

Correct AnswerverifiedShow Answer

Which of the following are barriers to entry?

Correct AnswerverifiedShow Answer

To be able to engage in profit-maximizing price searching,a monopoly firm must be able to

Correct AnswerverifiedShow Answer

When grocery stores issue special discount membership cards for shoppers effectively offering different prices based on quantities consumed,this is an example of

Correct AnswerverifiedShow Answer

Compared to an efficient perfectly competitive industry,the monopolist will

Correct AnswerverifiedShow Answer

-Refer to the above figure.The profit-maximizing price and output for this monopolist are

Correct AnswerverifiedShow Answer

Suppose that the profit maximizing level of output for the monopolist is 100 units,and ATC = $45.00; MC = $35.00; MR = $35.00; P = $45.00.What is the monopoly's profit?

Correct AnswerverifiedShow Answer

-In the above figure,if the firm is producing Q1 units at a price P1,the firm should

Correct AnswerverifiedShow Answer

If a monopolist produces to a point at which marginal revenue is more than marginal cost then

Correct AnswerverifiedShow Answer

A monopolist is defined as

Correct AnswerverifiedShow Answer

A patent provides legal protection for an invention for

Correct AnswerverifiedShow Answer

A patent on a product gives a firm

Correct AnswerverifiedShow Answer

A profit-maximizing monopolist earns an economic loss whenever

Correct AnswerverifiedShow Answer

Suppose that a drug for treating cancer is cleared by the Food and Drug Administration and that the company is successful in obtaining a patent for its product.Which of the following is then true?

Correct AnswerverifiedShow Answer

In a perfectly competitive market,if all firms face identical,constant marginal marginal cost curves,then consumer surplus is

Correct AnswerverifiedShow Answer

-Refer to the above figure.The long-run average cost curve and the long-run marginal cost curves represent

Correct AnswerverifiedShow Answer

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$\text { Quantity }$ -Use the above figure.The profit-maximizing output will be

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-In the above figure,if the firm is producing Q₁ units at a price P₁,the firm should

Correct Answer
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