Monopoly

question

$20,000.

answer

Wendy has a monopoly in the retailing of motor homes. She can sell five per week at $21,000 each. If she wants to sell six, she can charge only $20,000 each. The quantity effect of selling the sixth motor home is:

question

MR = MC is a profit-maximizing rule for any firm.

answer

Which of the following is true?

question

0.90/1.00.

answer

De Beers became a monopoly by:

question

higher; less elastic

answer

Price discrimination leads to a ________ price for consumers with a ________ demand.

question

is always below the demand curve.

answer

The monopolist's marginal revenue curve:

question

lower; more elastic

answer

Price discrimination leads to a ________ price for consumers with a ________ demand.

question

downward-sloping; perfectly elastic

answer

One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a ________ demand curve, while the purely competitive firm has a ________ demand curve.

question

price-elastic

answer

If a monopoly is producing at the profit-maximizing level of output, then we can assume that at that level of output, demand is:

question

can be increased by increasing price

answer

If a monopolist is producing a quantity that generates MC > MR, then profit:

question

lower; more elastic

answer

Price discrimination leads to a ________ price for consumers with a ________ demand.

question

higher; inelastic

answer

In order to maximize profits, an airline will offer ________ prices to customers with ________ demand.

question

economies of scale

answer

Suppose that you build a new jumbo jet that can carry five times more passengers than any other competitor. You have high fixed costs due to the quantity of capital used to build the jets. There's decreasing average cost for all levels of demand. In this case, your monopoly would result from which of the following?

question

the same as the industry's demand curve.

answer

The demand curve facing a monopolist is always:

question

is maximized

answer

If a monopolist is producing a quantity that generates MC = MR, then profit:

question

fall; increase

answer

If a monopoly market structure was transformed into a perfectly competitive one, one would find that price would ________ and output would ________.

question

not change; not change

answer

An increase in the fixed costs of a monopoly firm would ________ price and ________ quantity in the short run.

question

-$5,000.

answer

Wendy has a monopoly in the retailing of motor homes. She can sell five per week at $21,000 each. If she wants to sell six, she can only charge $20,000 each. The price effect of selling the sixth motor home is:

question

the monopoly will go out of business.

answer

If a change in fixed cost raises average total cost above the demand curve:

question

a ban on certain kinds of advertising

answer

Which of the following is not a barrier to entry?

question

increasing; increasing

answer

A monopolist responds to an increase in demand by ________ price and ________ output.

question

the deadweight loss will decrease

answer

If a monopoly is forced to charge a price equal to marginal cost:

question

price to rise, output to fall, consumer surplus to fall, producer surplus to rise, and deadweight loss to rise.

answer

Suppose a perfectly competitive market is suddenly transformed into one that operates as a monopoly market. We would expect:

question

elastic; reductions; large increases

answer

Because tourist demand for airline flights is relatively ________, small ________ in ticket price will result in relatively ________ in additional tourists.

question

higher prices

answer

Because of monopoly, consumers experience ________ than with perfect competition.

question

lower levels of production

answer

For a monopolist with a downward-sloping demand curve, the quantity effect dominates the price effect at:

question

increase profits.

answer

A monopolist or an imperfectly competitive firm practices price discrimination primarily to:

question

eventually incur losses if MC is less than ATC.

answer

A natural monopolist that is price regulated at the marginal cost output level will:

1 of 27

question

$20,000.

answer

question

MR = MC is a profit-maximizing rule for any firm.

answer

Which of the following is true?

question

0.90/1.00.

answer

De Beers became a monopoly by:

question

higher; less elastic

answer

Price discrimination leads to a ________ price for consumers with a ________ demand.

question

is always below the demand curve.

answer

The monopolist's marginal revenue curve:

question

lower; more elastic

answer

Price discrimination leads to a ________ price for consumers with a ________ demand.

question

downward-sloping; perfectly elastic

answer

One of the major differences between a monopolist and a purely competitive firm is that the monopolist has a ________ demand curve, while the purely competitive firm has a ________ demand curve.

question

price-elastic

answer

If a monopoly is producing at the profit-maximizing level of output, then we can assume that at that level of output, demand is:

question

can be increased by increasing price

answer

If a monopolist is producing a quantity that generates MC > MR, then profit:

question

lower; more elastic

answer

Price discrimination leads to a ________ price for consumers with a ________ demand.

question

higher; inelastic

answer

In order to maximize profits, an airline will offer ________ prices to customers with ________ demand.

question

economies of scale

answer

question

the same as the industry's demand curve.

answer

The demand curve facing a monopolist is always:

question

is maximized

answer

If a monopolist is producing a quantity that generates MC = MR, then profit:

question

fall; increase

answer

If a monopoly market structure was transformed into a perfectly competitive one, one would find that price would ________ and output would ________.

question

not change; not change

answer

An increase in the fixed costs of a monopoly firm would ________ price and ________ quantity in the short run.

question

-$5,000.

answer

question

the monopoly will go out of business.

answer

If a change in fixed cost raises average total cost above the demand curve:

question

a ban on certain kinds of advertising

answer

Which of the following is not a barrier to entry?

question

increasing; increasing

answer

A monopolist responds to an increase in demand by ________ price and ________ output.

question

the deadweight loss will decrease

answer

If a monopoly is forced to charge a price equal to marginal cost:

question

price to rise, output to fall, consumer surplus to fall, producer surplus to rise, and deadweight loss to rise.

answer

Suppose a perfectly competitive market is suddenly transformed into one that operates as a monopoly market. We would expect:

question

elastic; reductions; large increases

answer

Because tourist demand for airline flights is relatively ________, small ________ in ticket price will result in relatively ________ in additional tourists.

question

higher prices

answer

Because of monopoly, consumers experience ________ than with perfect competition.

question

lower levels of production

answer

For a monopolist with a downward-sloping demand curve, the quantity effect dominates the price effect at:

question

increase profits.

answer

A monopolist or an imperfectly competitive firm practices price discrimination primarily to:

question

eventually incur losses if MC is less than ATC.

answer

A natural monopolist that is price regulated at the marginal cost output level will:

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Monopoly

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