Question 1

Patent and copyright laws encourage

Accepted Answer

A)   creative activity.
B)   research and development.
C)   competition among firms.
D)   Both a and b are correct.E) A) and B)
F) C) and D)

Question 2

Figure 15-12 
-Refer to Figure 15-12.If there are no fixed costs of production,monopoly profit without price discrimination equals

Accepted Answer

A)   $0.
B)   $1,562.50.
C)   $3,125.
D)   $6,250.E) A) and B)
F) All of the above

Question 3

For a monopoly firm,the shape and position of the demand curve play a role in determining

Accepted Answer

A)   (i) and (ii) only
B)   (ii) and (iii) only
C)   (i) and (iii) only
D)   (i) ,(ii) ,and (iii) E) A) and C)
F) A) and B)

Question 4

Figure 15-3 
-Refer to Figure 15-3.What area measures the monopolist's profit?

Accepted Answer

A)   (B-F) *K
B)   (A-H) *J
C)   (B-G) *K
D)   0.5[(B-F) *(L-K) ]E) B) and D)
F) All of the above

Question 5

Figure 15-5 
-Refer to Figure 15-5.A profit-maximizing monopoly's profit is equal to

Accepted Answer

A)   P4 x Q3.
B)   (P4-P2) x Q3.
C)   (P4-P1) x Q3.
D)   (P5-P0) x Q1.E) C) and D)
F) A) and D)

Question 6

A monopoly market is characterized by

Accepted Answer

A)   many buyers and sellers.
B)   "natural" products.
C)   barriers to entry.
D)   a Nash equilibrium.E) B) and C)
F) A) and C)

Question 7

For a monopoly,the level of output at which marginal revenue equals zero is also the level of output at which

Accepted Answer

A)   average revenue is zero.
B)   profit is maximized.
C)   total revenue is maximized.
D)   marginal cost is zero.E) B) and C)
F) B) and D)

Question 8

A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces.

Accepted Answer

A) True 
 B)False

Question 9

Goods that do not have close substitutes have downward-sloping demand curves.

Accepted Answer

A) True 
 B)False

Question 10

Government intervention always reduces monopoly deadweight loss.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a reason for the existence of a monopoly?

Accepted Answer

A)   sole ownership of a key resource
B)   patents
C)   copyrights
D)   diseconomies of scaleE) B) and D)
F) B) and C)

Question 12

Scenario 15-2
A monopoly firm maximizes its profit by producing Q = 500 units of output.At that level of output,its marginal revenue is $30,its average revenue is $60,and its average total cost is $34.
-Refer to Scenario 15-2.At Q = 500,the firm's profit is

Accepted Answer

A)   $13,000.
B)   $15,000.
C)   $17,000.
D)   $30,000.E) A) and B)
F) A) and C)

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

If a monopolist's marginal costs increase by $1 for all levels of output,then

Accepted Answer

A)   the monopoly price will rise by $1.
B)   the monopoly price will rise by more than $1.
C)   the monopoly price will rise by less than $1.
D)   there is no change in the monopoly price and profits fall.E) A) and B)
F) A) and C)

Question 15

Figure 15-5 
-Refer to Figure 15-5.Profit on a typical unit sold for a profit-maximizing monopoly would equal

Accepted Answer

A)   P5-P0.
B)   P4-P2.
C)   P4-P1.
D)   P4-P3.E) C) and D)
F) None of the above

Question 16

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Accepted Answer

The private monopolist is governed by th...

Question 17

If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost,the firm has no incentive to reduce costs.

Accepted Answer

A) True 
 B)False

Question 18

The social cost of a monopoly is equal to its

Accepted Answer

A)   economic profit.
B)   fixed cost.
C)   dead weight loss.
D)   variable cost.E) C) and D)
F) None of the above

Question 19

Figure 15-4 
-Refer to Figure 15-4.Profit will be maximized by charging a price equal to

Accepted Answer

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

Question 20

In a market characterized by monopoly,the market demand curve is

Accepted Answer

A)   upward sloping.
B)   horizontal.
C)   downward sloping.
D)   vertical.E) B) and C)
F) A) and B)

Exam 15: Monopoly

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

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Why might economists prefer private ownership of monopolies over public ownership of monopolies?

Correct AnswerverifiedThe private monopolist is governed by th...View AnswerShow Answer

Figure 15-3 -Refer to Figure 15-3.What area measures the monopolist's profit?

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For a monopoly firm,the shape and position of the demand curve play a role in determining

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Scenario 15-2 A monopoly firm maximizes its profit by producing Q = 500 units of output.At that level of output,its marginal revenue is $30,its average revenue is $60,and its average total cost is $34. -Refer to Scenario 15-2.At Q = 500,the firm's profit is

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In a market characterized by monopoly,the market demand curve is

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Figure 15-5 -Refer to Figure 15-5.Profit on a typical unit sold for a profit-maximizing monopoly would equal

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Which of the following is not a reason for the existence of a monopoly?

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A monopoly market is characterized by

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If a monopolist's marginal costs increase by $1 for all levels of output,then

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Patent and copyright laws encourage

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For a monopoly,the level of output at which marginal revenue equals zero is also the level of output at which

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Government intervention always reduces monopoly deadweight loss.

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Figure 15-4 -Refer to Figure 15-4.Profit will be maximized by charging a price equal to

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If the government regulates the price a natural monopolist can charge to be equal to the firm's average total cost,the firm has no incentive to reduce costs.

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A monopolist does not have a supply curve because the firm's decision about how much to supply is impossible to separate from the demand curve it faces.

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The social cost of a monopoly is equal to its

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Figure 15-12 -Refer to Figure 15-12.If there are no fixed costs of production,monopoly profit without price discrimination equals

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Goods that do not have close substitutes have downward-sloping demand curves.

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Figure 15-5 -Refer to Figure 15-5.A profit-maximizing monopoly's profit is equal to

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The private monopolist is governed by th...
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