Question 1

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 2

Table 14-6
A monopolist faces the following demand curve:
 
-Refer to Table 14-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the profit-maximizing price?

Accepted Answer

A)   $6
B)   $9
C)   $12
D)   $15E) B) and D)
F) B) and C)

Question 3

The collection of statutes aimed at curbing monopoly power is called

Accepted Answer

A)   the 14th amendment.
B)   the Clayton Act.
C)   the Sherman Act.
D)   antitrust law.E) None of the above
F) B) and D)

Question 4

Figure 14-2    
-Refer to Figure 14-2.Which of the following statements is correct?

Accepted Answer

A)   Panel C represents the typical demand curve for a perfectly competitive firm,and Panel B represents the typical demand curve for a monopoly.
B)   Panel B represents the typical demand curve for a perfectly competitive firm,and Panel C represents the typical demand curve for a monopoly.
C)   Panel A represents the typical demand curve for a perfectly competitive firm,and Panel B represents the typical demand curve for a monopoly.
D)   Panel C represents the typical demand curve for a perfectly competitive firm,and Panel D represents the typical demand curve for a monopoly.E) A) and D)
F) B) and D)

Question 5

A patent gives a single person or firm the exclusive right to sell some good or service for a specific period of time.

Accepted Answer

A) True 
 B)False

Question 6

Table 14-8
The following table provides information on the price,quantity,and average total cost for a monopoly.
 
-Refer to Table 14-8.How much extra revenue does the monopolist earn when he lowers the price from $18 to $12?

Accepted Answer

A)   $10
B)   $12
C)   $30
D)   $41E) A) and B)
F) B) and C)

Question 7

Figure 14-8 
-Refer to Figure 14-8.The monopolist's maximum profit

Accepted Answer

A)   is $800.
B)   is $1,000.
C)   is $1,250.
D)   cannot be determined from the diagram.E) None of the above
F) A) and B)

Question 8

Table 14-3
Consider the following demand and cost information for a monopoly.
 
-Refer to Table 14-3.The maximum profit this monopolist can earn is

Accepted Answer

A)   $5.
B)   $15.
C)   $16.
D)   $28.E) A) and B)
F) A) and C)

Question 9

For a typical natural monopoly,average total cost is

Accepted Answer

A)   falling,and marginal cost is above average total cost.
B)   falling,and marginal cost is below average total cost.
C)   rising,and marginal cost is below average total cost.
D)   rising,and marginal cost is above average total cost.E) B) and C)
F) A) and C)

Question 10

Table 14-7
Sally owns the only shoe store in town.She has the following cost and revenue information.
 
-Refer to Table 14-7.What is the average revenue when Sally sells 7 pairs of shoes?

Accepted Answer

A)   $40
B)   $90
C)   $100
D)   $700E) B) and C)
F) A) and D)

Question 11

Table 14-2
Tanya has the following demand curve for selling taffy.Assume that Tanya has a marginal cost of $3 per unit.
 
-Refer to Table 14-2.What is Tanya's profit-maximizing level of output?

Accepted Answer

A)   1
B)   2
C)   3
D)   4E) None of the above
F) All of the above

Question 12

Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry.

Accepted Answer

A) True 
 B)False

Question 13

Like competitive firms,monopolies charge a price equal to marginal cost.

Accepted Answer

A) True 
 B)False

Question 14

Competitive firms have

Accepted Answer

A)   downward-sloping demand curves,and they can sell as much output as they desire at the market price.
B)   downward-sloping demand curves,and they can sell only a limited quantity of output at each price.
C)   horizontal demand curves,and they can sell as much output as they desire at the market price.
D)   horizontal demand curves,and they can sell only a limited quantity of output at each price.E) All of the above
F) A) and B)

Question 15

Figure 14-5 
-Refer to Figure 14-5.How much output will the monopolist produce?

Accepted Answer

A)   O
B)   J
C)   K
D)   LE) B) and C)
F) A) and B)

Question 16

Which of the following is not correct?

Accepted Answer

A)   The demand curve facing a competitive firm is perfectly elastic.
B)   The demand curve facing a monopolist is the market demand curve.
C)   A monopolist can charge any price and sell any quantity that it chooses.
D)   A monopolist can alter the market price by adjusting the quantity that it produces.E) A) and B)
F) A) and C)

Question 17

Figure 14-4  x Q4. D)  (P4-P2) x Q3." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 14-4.A profit-maximizing monopoly's total revenue is equal to

Accepted Answer

A)   P4 x Q3.
B)   P5 x Q1.
C)   P3  x Q4.
D)   (P4-P2) x Q3.E) A) and C)
F) B) and C)

Question 18

A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

Accepted Answer

A)   can prevent children from buying the lower-priced tickets and selling them to adults.
B)   has some degree of monopoly pricing power.
C)   can easily distinguish between the two groups of customers.
D)   All of the above are correct.E) A) and D)
F) A) and C)

Question 19

The deadweight loss for a monopolist equals one-half of its profits for any given level of output.

Accepted Answer

A) True 
 B)False

Question 20

Figure 14-5 
-Refer to Figure 14-5.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 C)
F) None of the above

Exam 14: Monopoly

Table 14-2 Tanya has the following demand curve for selling taffy.Assume that Tanya has a marginal cost of $3 per unit. -Refer to Table 14-2.What is Tanya's profit-maximizing level of output?

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Table 14-6 A monopolist faces the following demand curve: -Refer to Table 14-6.Suppose the monopolist has total fixed costs equal to $5 and a variable cost equal to $4 per unit for all units produced.What is the profit-maximizing price?

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Table 14-8 The following table provides information on the price,quantity,and average total cost for a monopoly. -Refer to Table 14-8.How much extra revenue does the monopolist earn when he lowers the price from $18 to $12?

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Table 14-3 Consider the following demand and cost information for a monopoly. -Refer to Table 14-3.The maximum profit this monopolist can earn is

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For a typical natural monopoly,average total cost is

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Like competitive firms,monopolies charge a price equal to marginal cost.

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Figure 14-5 -Refer to Figure 14-5.What area measures the monopolist's profit?

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A movie theater can increase its profits through price discrimination by charging a higher price to adults and a lower price to children if it

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Figure 14-8 -Refer to Figure 14-8.The monopolist's maximum profit

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Table 14-7 Sally owns the only shoe store in town.She has the following cost and revenue information. -Refer to Table 14-7.What is the average revenue when Sally sells 7 pairs of shoes?

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The deadweight loss for a monopolist equals one-half of its profits for any given level of output.

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Deadweight loss measures the loss in society's welfare that occurs because a monopolist can earn profits without the concern of new firms entering its industry.

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Which of the following is not correct?

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Figure 14-5 -Refer to Figure 14-5.How much output will the monopolist produce?

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Competitive firms have

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Figure 14-2 -Refer to Figure 14-2.Which of the following statements is correct?

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The collection of statutes aimed at curbing monopoly power is called

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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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Figure 14-4 -Refer to Figure 14-4.A profit-maximizing monopoly's total revenue is equal to

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A patent gives a single person or firm the exclusive right to sell some good or service for a specific period of time.

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