Question 1

Give some examples of the benefits and costs of antitrust laws.

Accepted Answer

Benefits include promoting com...

Question 2

The three main sources of barriers to entry are monopoly resources, government regulation, and the firm's production process.

Accepted Answer

A) True 
 B)False

Question 3

Figure 15-10
​  ​
-Refer to Figure 15-10. If the firm profit-maximizes, what amount of output will it produce?

Accepted Answer

The answer of Figure 15-10
​  ​
-Refer to Figure 15-10....

Question 4

Which of the following statements is not correct?

Accepted Answer

A)  The government may use antitrust laws to break up an existing company to improve competition.
B)  The government may break up a natural monopoly to lower the price charged to customers.
C)  Economists usually prefer private ownership to public ownership of natural monopolies.
D)  Sometimes the best strategy is for the government to do nothing about monopoly inefficiency because the "fix" may be worse than the problem.E) All of the above
F) A) and B)

Question 5

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Accepted Answer

perfectly ...

Question 6

Some companies merge in order to lower costs through efficient joint production.

Accepted Answer

A) True 
 B)False

Question 7

Scenario 15-1
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $40, its average revenue is $80, and its average total cost is $44.
-If a pharmaceutical company discovers a new drug and successfully patents it, patent law gives the firm

Accepted Answer

A)  partial ownership of the right to sell the drug for a limited number of years.
B)  partial ownership of the right to sell the drug for an unlimited number of years.
C)  sole ownership of the right to sell the drug for a limited number of years.
D)  sole ownership of the right to sell the drug for an unlimited number of years.E) B) and D)
F) A) and C)

Question 8

Figure 15-4  ​
​
-Refer to Figure 15-4. How much output will the monopolist produce in order to maximize profit?

Accepted Answer

A)  0
B)  N
C)  O
D)  PE) A) and D)
F) B) and C)

Question 9

Antitrust laws have economic benefits that outweigh the costs if they

Accepted Answer

A)  prevent mergers that would decrease competition and lower the costs of production.
B)  prevent mergers that would decrease competition and raise the costs of production.
C)  allow mergers that would decrease competition and raise the costs of production.
D)  allow mergers that would decrease competition regardless of what happens to the costs of production.E) B) and D)
F) All of the above

Question 10

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Accepted Answer

A) True 
 B)False

Question 11

Figure 15-12
​  ​
-Refer to Figure 15-12. If this firm profit maximizes, which letter represents the quantity it will produce?

Accepted Answer

The answer of Figure 15-12
​  ​
-Refer to Figure 15-12....

Question 12

The proper level of government intervention is unclear when dealing with a monopoly.

Accepted Answer

A) True 
 B)False

Question 13

Figure 15-6  ​
​
-Refer to Figure 15-6. What is the monopoly price and quantity?

Accepted Answer

A)  Price = X; quantity = J
B)  Price = Y; quantity = K
C)  Price = Y; quantity = J
D)  Price = Z; quantity = JE) None of the above
F) B) and D)

Question 14

Figure 15-5
The following graph depicts the market situation for a monopoly pastry shop called Bearclaws. 
-Refer to Figure 15-5. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Accepted Answer

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

Question 15

If a monopolist is able to perfectly price discriminate,

Accepted Answer

A)  consumer surplus is always increased.
B)  total surplus is always decreased.
C)  consumer surplus and deadweight losses are transformed into monopoly profits.
D)  the price effect dominates the output effect on monopoly revenue.E) A) and B)
F) None of the above

Question 16

Figure 15-6  ​
​
-Refer to Figure 15-6. What is the socially efficient price and quantity?

Accepted Answer

A)  Price = X; quantity = J
B)  Price = Y; quantity = K
C)  Price = Y; quantity = J
D)  Price = Z; quantity = KE) B) and C)
F) B) and D)

Question 17

Figure 15-12
​  ​
-Refer to Figure 15-12. If this firm profit maximizes, which letter represents the price it will charge?

Accepted Answer

The answer of Figure 15-12
​  ​
-Refer to Figure 15-12....

Question 18

One solution to the problems of marginal-cost pricing of a regulated natural monopolist is average cost pricing. In this model, the monopolist is allowed to price its production at average total cost. How does average-cost pricing differ from marginal-cost pricing? Does this solution maximize social well-being?

Accepted Answer

Under average-cost pricing, the monopoli...

Question 19

Figure 15-11
​  ​
-Refer to Figure 15-11. If this firm were able to perfectly price discriminate, which letter represents the amount of output it would produce?

Accepted Answer

The answer of Figure 15-11
​  ​
-Refer to Figure 15-11....

Question 20

Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing?

Accepted Answer

A)  Policymakers can regulate prices that the monopoly charges.
B)  Prohibit the monopoly from price discriminating.
C)  Force the monopoly to operate at a point where its marginal revenue is equal to its marginal cost.
D)  There is nothing the government can do to eliminate any inefficiency associated with a monopoly.E) A) and B)
F) B) and C)

Exam 15: Monopoly

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Figure 15-10 -Refer to Figure 15-10. If the firm profit-maximizes, what amount of output will it produce?

Correct Answer
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Some companies merge in order to lower costs through efficient joint production.

Correct Answer
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Figure 15-12 -Refer to Figure 15-12. If this firm profit maximizes, which letter represents the price it will charge?

Correct Answer
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Figure 15-4 -Refer to Figure 15-4. How much output will the monopolist produce in order to maximize profit?

Correct Answer
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Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing?

Correct Answer
verified

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Correct Answer
verified
perfectly ...
View Answer

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Correct Answer
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Figure 15-12 -Refer to Figure 15-12. If this firm profit maximizes, which letter represents the quantity it will produce?

Correct Answer
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Figure 15-6 -Refer to Figure 15-6. What is the socially efficient price and quantity?

Correct Answer
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The three main sources of barriers to entry are monopoly resources, government regulation, and the firm's production process.

Correct Answer
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Figure 15-6 -Refer to Figure 15-6. What is the monopoly price and quantity?

Correct Answer
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Figure 15-5 The following graph depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-5. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Correct Answer
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Give some examples of the benefits and costs of antitrust laws.

Correct Answer
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Benefits include promoting com...
View Answer

The proper level of government intervention is unclear when dealing with a monopoly.

Correct Answer
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If a monopolist is able to perfectly price discriminate,

Correct Answer
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Figure 15-11 -Refer to Figure 15-11. If this firm were able to perfectly price discriminate, which letter represents the amount of output it would produce?

Correct Answer
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Which of the following statements is not correct?

Correct Answer
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Correct Answer
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Under average-cost pricing, the monopoli...
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Antitrust laws have economic benefits that outweigh the costs if they

Correct Answer
verified

Exam 15: Monopoly

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Figure 15-10 ​ ​ -Refer to Figure 15-10. If the firm profit-maximizes, what amount of output will it produce?

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Some companies merge in order to lower costs through efficient joint production.

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Figure 15-12 ​ ​ -Refer to Figure 15-12. If this firm profit maximizes, which letter represents the price it will charge?

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Figure 15-4 ​ ​ -Refer to Figure 15-4. How much output will the monopolist produce in order to maximize profit?

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Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing?

Correct AnswerverifiedShow Answer

Comparing firms in perfectly competitive markets to monopoly firms, which charges a price equal to marginal cost?

Correct Answerverifiedperfectly ...View AnswerShow Answer

Declining average total cost with increased production is one of the defining characteristics of a natural monopoly.

Correct AnswerverifiedShow Answer

Figure 15-12 ​ ​ -Refer to Figure 15-12. If this firm profit maximizes, which letter represents the quantity it will produce?

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Figure 15-6 ​ ​ -Refer to Figure 15-6. What is the socially efficient price and quantity?

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The three main sources of barriers to entry are monopoly resources, government regulation, and the firm's production process.

Correct AnswerverifiedShow Answer

Figure 15-6 ​ ​ -Refer to Figure 15-6. What is the monopoly price and quantity?

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Figure 15-5 The following graph depicts the market situation for a monopoly pastry shop called Bearclaws. -Refer to Figure 15-5. Based upon the information shown, what price will Bearclaws charge to maximize profits?

Correct AnswerverifiedShow Answer

Give some examples of the benefits and costs of antitrust laws.

Correct AnswerverifiedBenefits include promoting com...View AnswerShow Answer

The proper level of government intervention is unclear when dealing with a monopoly.

Correct AnswerverifiedShow Answer

If a monopolist is able to perfectly price discriminate,

Correct AnswerverifiedShow Answer

Figure 15-11 ​ ​ -Refer to Figure 15-11. If this firm were able to perfectly price discriminate, which letter represents the amount of output it would produce?

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Which of the following statements is not correct?

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Correct AnswerverifiedUnder average-cost pricing, the monopoli...View AnswerShow Answer

Antitrust laws have economic benefits that outweigh the costs if they

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Correct Answer
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Figure 15-10 -Refer to Figure 15-10. If the firm profit-maximizes, what amount of output will it produce?

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Correct Answer
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Figure 15-12 -Refer to Figure 15-12. If this firm profit maximizes, which letter represents the price it will charge?

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Figure 15-4 -Refer to Figure 15-4. How much output will the monopolist produce in order to maximize profit?

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Correct Answer
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Correct Answer
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perfectly ...
View Answer

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Figure 15-12 -Refer to Figure 15-12. If this firm profit maximizes, which letter represents the quantity it will produce?

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Figure 15-6 -Refer to Figure 15-6. What is the socially efficient price and quantity?

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Correct Answer
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Figure 15-6 -Refer to Figure 15-6. What is the monopoly price and quantity?

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Correct Answer
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Correct Answer
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Benefits include promoting com...
View Answer

Correct Answer
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Correct Answer
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Figure 15-11 -Refer to Figure 15-11. If this firm were able to perfectly price discriminate, which letter represents the amount of output it would produce?

Correct Answer
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Correct Answer
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Correct Answer
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Under average-cost pricing, the monopoli...
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