Question 1

When a government owns a natural monopoly, it can:

Accepted Answer

A)  lose the incentive to be efficient.
B)  operate at a loss.
C)  make business decisions based on political pressures.
D)  All of these are true.E) A) and B)
F) B) and C)

Question 2

For a monopoly, marginal revenue for all units greater than one:

Accepted Answer

A)  is always less than the price.
B)  cannot be negative.
C)  is zero when total profits are maximized.
D)  is always greater than marginal cost.E) B) and C)
F) C) and D)

Question 3

The monopolist and the perfectly competitive firm both maximize profits by choosing to produce at the level of output where:

Accepted Answer

A)  marginal cost equals marginal revenue, and price is equal to minimum average total cost.
B)  marginal cost intersects demand, and the price is determined by this intersection.
C)  marginal cost equals marginal revenue, and price is equal to average revenue.
D)  marginal cost equals average revenue, and price is equal to minimum average total cost.E) All of the above
F) A) and D)

Question 4

Which of the following is a potential barrier to entry into a monopoly market?

Accepted Answer

A)  The monopolist owns a key resource or input.
B)  Too many competitors already exist in the market.
C)  High input costs.
D)  Few buyers.E) B) and C)
F) All of the above

Question 5

A monopoly:

Accepted Answer

A)  is constrained because its decisions cannot affect the market price.
B)  is constrained by demand.
C)  faces a horizontal demand curve.
D)  is constantly threatened by the entry of new firms.E) A) and B)
F) A) and C)

Question 6

For a monopolist, at the profit-maximizing level of output, price is:

Accepted Answer

A)  equal to marginal revenue.
B)  equal to marginal cost.
C)  chosen according to demand.
D)  increasing.E) All of the above
F) A) and B)

Question 7

The regulation of natural monopolies:

Accepted Answer

A)  typically involves setting a maximum price that the monopolist can charge.
B)  always causes the industry to operate at a loss.
C)  eliminates deadweight loss.
D)  typically involves setting a maximum quantity that the monopolist can produce.E) A) and B)
F) None of the above

Question 8

This graph shows the cost and revenue curves faced by a monopoly.  The profit-maximizing price and quantity is:

Accepted Answer

A)  $10; 80
B)  $8; 50
C)  $12; 60
D)  $13; 50E) B) and D)
F) A) and D)

Question 9

The existence of a monopoly:increases total surplus.increases consumer surplus.increases producer surplus.

Accepted Answer

A)  I and III only
B)  II only
C)  III only
D)  None of these result from the existence of a monopoly.E) A) and C)
F) All of the above

Question 10

Which of the following is not one way a government might protect monopoly rights?

Accepted Answer

A)  Protecting intellectual property rights
B)  Subsidizing a state-owned entity
C)  Making it illegal to enter an industry
D)  Heavy taxation of potential competitorsE) A) and C)
F) B) and D)

Question 11

For a monopolist, total revenue will:

Accepted Answer

A)  initially increase and eventually decrease as output increases.
B)  initially decrease and eventually increase as output increases.
C)  always increase as output increases.
D)  always decrease as output increases.E) A) and D)
F) B) and C)

Exam 14: Monopoly

The existence of a monopoly:increases total surplus.increases consumer surplus.increases producer surplus.

Correct Answer
verified

Which of the following is a potential barrier to entry into a monopoly market?

Correct Answer
verified

This graph shows the cost and revenue curves faced by a monopoly. The profit-maximizing price and quantity is:

Correct Answer
verified

The monopolist and the perfectly competitive firm both maximize profits by choosing to produce at the level of output where:

Correct Answer
verified

A monopoly:

Correct Answer
verified

For a monopolist, at the profit-maximizing level of output, price is:

Correct Answer
verified

For a monopolist, total revenue will:

Correct Answer
verified

For a monopoly, marginal revenue for all units greater than one:

Correct Answer
verified

When a government owns a natural monopoly, it can:

Correct Answer
verified

Which of the following is not one way a government might protect monopoly rights?

Correct Answer
verified

The regulation of natural monopolies:

Correct Answer
verified

Exam 14: Monopoly

The existence of a monopoly:increases total surplus.increases consumer surplus.increases producer surplus.

Correct AnswerverifiedShow Answer

Which of the following is a potential barrier to entry into a monopoly market?

Correct AnswerverifiedShow Answer

This graph shows the cost and revenue curves faced by a monopoly. The profit-maximizing price and quantity is:

Correct AnswerverifiedShow Answer

The monopolist and the perfectly competitive firm both maximize profits by choosing to produce at the level of output where:

Correct AnswerverifiedShow Answer

A monopoly:

Correct AnswerverifiedShow Answer

For a monopolist, at the profit-maximizing level of output, price is:

Correct AnswerverifiedShow Answer

For a monopolist, total revenue will:

Correct AnswerverifiedShow Answer

For a monopoly, marginal revenue for all units greater than one:

Correct AnswerverifiedShow Answer

When a government owns a natural monopoly, it can:

Correct AnswerverifiedShow Answer

Which of the following is not one way a government might protect monopoly rights?

Correct AnswerverifiedShow Answer

The regulation of natural monopolies:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified