Question 1

Table 15-12
The following table provides information on the price, quantity, and average total cost for a monopoly. 
-Refer to Table 15-12. If the firm produces the profit-maximizing level of output, it will earn profits of

Accepted Answer

A)  $24.
B)  $18.
C)  $15.
D)  $12.E) B) and C)
F) A) and B)

Question 2

Scenario 15-1
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is:
Passenger Type
Willingness to Pay
Demand per day
Adults
$18
70
Children
$10
25
Senior Citizens
$12
55
Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.
-Refer to Scenario 15-1. One of Vincent's friends tells him he would be more profitable if he charged a single price of $12. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $12?

Accepted Answer

The answer of Scenario 15-1
Vincent operates a scenic tour business...

Question 3

Most firms have

Accepted Answer

A)  no monopoly pricing power.
B)  some monopoly pricing power.
C)  absolute monopoly pricing power.
D)  the ability to earn monopoly profits.E) A) and D)
F) C) and D)

Question 4

Compared to the monopoly outcome with a single price, imperfect price discrimination
(i) sometimes raises total surplus.
(ii) sometimes lowers total surplus.
(iii) always leads to a lower quantity of output.

Accepted Answer

A)  (i)  and (ii)  only
B)  (ii)  and (iii)  only
C)  (i)  and (iii)  only
D)  (i) , (ii) , and (iii) E) All of the above
F) A) and B)

Question 5

​Figure 15-22
The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. 
-Refer to Figure 15-22. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Accepted Answer

A)  ​$7.
B)  ​$10.50.
C)  ​$14.
D)  ​$12.E) A) and B)
F) A) and C)

Question 6

Table 15-19
A monopolist faces the following demand curve: 
-Refer to Table 15-19. If a monopolist faces a constant marginal cost of $7, how much output should the firm produce?

Accepted Answer

A)  3 units
B)  4 units
C)  5 units
D)  6 unitsE) A) and D)
F) All of the above

Question 7

Suppose a profit-maximizing monopolist faces a constant marginal cost of $10, produces an output level of 100 units, and charges a price of $50. The socially efficient level of output is 200 units. Assume that the demand curve and marginal revenue curve are the typical downward-sloping straight lines. The monopoly deadweight loss equals $2,000.

Accepted Answer

A) True 
 B)False

Question 8

Table 15-7
Sally owns the only shoe store in town. She has the following cost and revenue information. 
-Refer to Table 15-7. What is the marginal revenue from selling the 8th pair of shoes?

Accepted Answer

A)  $10
B)  $20
C)  $40
D)  $90E) A) and D)
F) All of the above

Question 9

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Accepted Answer

A)  earn economic losses.
B)  earn economic profits.
C)  earn zero economic profits.
D)  produce a lower quantity of output than is socially optimal.E) A) and B)
F) A) and D)

Question 10

Table 15-16
A monopolist faces the following demand curve: 
-Refer to Table 15-16. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's average total cost is

Accepted Answer

A)  $9.00.
B)  $7.50.
C)  $6.74.
D)  $5.82.E) C) and D)
F) None of the above

Question 11

Perfect price discrimination

Accepted Answer

A)  eliminates deadweight loss.
B)  reduces profits to the monopolist.
C)  decreases the total quantity sold by the monopolist.
D)  requires arbitrage in order for the monopolist to maximize profits.E) A) and B)
F) B) and C)

Question 12

A monopolist maximizes profits by

Accepted Answer

A)  producing an output level where marginal revenue equals marginal cost.
B)  charging a price equal to marginal revenue and marginal cost.
C)  charging a price where marginal cost equals average total cost.
D)  Both a and b are correct.E) All of the above
F) B) and D)

Question 13

Table 15-4
A monopolist faces the following demand curve: 
-Refer to Table 15-4. In order to maximize profits, the monopolist should produce

Accepted Answer

A)  7.5 units.
B)  10 units.
C)  where marginal revenue equals marginal cost.
D)  Both a and c are correct.E) A) and C)
F) None of the above

Question 14

Microsoft's government-granted exclusive right to make and sell the Windows operating system is called a

Accepted Answer

The answer of Microsoft's government-granted exclusive right to make and...

Question 15

A natural monopolist's ability to price its product is

Accepted Answer

A)  constrained by the market demand curve.
B)  constrained by market supply.
C)  not affected by market demand.
D)  enhanced by regulatory control of the government.E) A) and B)
F) A) and D)

Question 16

Even with market power, monopolists cannot achieve any level of profit they desire because they will sell lower quantities at higher prices.

Accepted Answer

A) True 
 B)False

Question 17

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Accepted Answer

A)  false; price increases will mean fewer sales, which may lower profits.
B)  true; this is the primary reason why economists believe that monopolies result in economic inefficiency.
C)  false; the monopolist is a price taker.
D)  true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices.E) B) and D)
F) None of the above

Question 18

For a monopoly market, total surplus can be defined as the value of the good to

Accepted Answer

A)  producers minus the cost incurred by consumers.
B)  producers plus the cost incurred by consumers.
C)  consumers minus the costs of producing the good.
D)  consumers plus the cost of producing the good.E) A) and C)
F) B) and C)

Question 19

Government intervention always reduces monopoly deadweight loss.

Accepted Answer

A) True 
 B)False

Question 20

For a monopoly,

Accepted Answer

A)  average revenue exceeds marginal revenue.
B)  average revenue equals marginal revenue.
C)  average revenue is less than marginal revenue.
D)  price equals marginal revenue.E) A) and B)
F) B) and C)

Exam 15: Monopoly

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Correct Answer
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A natural monopolist's ability to price its product is

Correct Answer
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Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $7, how much output should the firm produce?

Correct Answer
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A monopolist maximizes profits by

Correct Answer
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Perfect price discrimination

Correct Answer
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If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Correct Answer
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Correct Answer
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Correct Answer
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Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. In order to maximize profits, the monopolist should produce

Correct Answer
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Compared to the monopoly outcome with a single price, imperfect price discrimination (i) sometimes raises total surplus. (ii) sometimes lowers total surplus. (iii) always leads to a lower quantity of output.

Correct Answer
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Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the marginal revenue from selling the 8th pair of shoes?

Correct Answer
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For a monopoly,

Correct Answer
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"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Correct Answer
verified

Table 15-12 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-12. If the firm produces the profit-maximizing level of output, it will earn profits of

Correct Answer
verified

Microsoft's government-granted exclusive right to make and sell the Windows operating system is called a

Correct Answer
verified

Even with market power, monopolists cannot achieve any level of profit they desire because they will sell lower quantities at higher prices.

Correct Answer
verified

Most firms have

Correct Answer
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Table 15-16 A monopolist faces the following demand curve: -Refer to Table 15-16. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's average total cost is

Correct Answer
verified

For a monopoly market, total surplus can be defined as the value of the good to

Correct Answer
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Government intervention always reduces monopoly deadweight loss.

Correct Answer
verified

Exam 15: Monopoly

​Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Correct AnswerverifiedShow Answer

A natural monopolist's ability to price its product is

Correct AnswerverifiedShow Answer

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $7, how much output should the firm produce?

Correct AnswerverifiedShow Answer

A monopolist maximizes profits by

Correct AnswerverifiedShow Answer

Perfect price discrimination

Correct AnswerverifiedShow Answer

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. In order to maximize profits, the monopolist should produce

Correct AnswerverifiedShow Answer

Compared to the monopoly outcome with a single price, imperfect price discrimination (i) sometimes raises total surplus. (ii) sometimes lowers total surplus. (iii) always leads to a lower quantity of output.

Correct AnswerverifiedShow Answer

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What is the marginal revenue from selling the 8th pair of shoes?

Correct AnswerverifiedShow Answer

For a monopoly,

Correct AnswerverifiedShow Answer

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

Correct AnswerverifiedShow Answer

Table 15-12 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-12. If the firm produces the profit-maximizing level of output, it will earn profits of

Correct AnswerverifiedShow Answer

Microsoft's government-granted exclusive right to make and sell the Windows operating system is called a

Correct AnswerverifiedShow Answer

Even with market power, monopolists cannot achieve any level of profit they desire because they will sell lower quantities at higher prices.

Correct AnswerverifiedShow Answer

Most firms have

Correct AnswerverifiedShow Answer

Table 15-16 A monopolist faces the following demand curve: -Refer to Table 15-16. The monopolist has total fixed costs of $40 and a constant marginal cost of $5. At the profit-maximizing level of output, the monopolist's average total cost is

Correct AnswerverifiedShow Answer

For a monopoly market, total surplus can be defined as the value of the good to

Correct AnswerverifiedShow Answer

Government intervention always reduces monopoly deadweight loss.

Correct AnswerverifiedShow Answer

Figure 15-22 The diagram depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-22. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Correct Answer
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