Microeconomics ch 12 quiz
Refer to the graph above for an industry. If the industry were a pure monopoly, the product price would be:
$16
One feature of pure monopoly is that the firm is:
A price maker
With non-rivalrous consumption such as in the case of online music and movies, as more consumers buy the product:
The average cost of the output declines because the marginal cost is very small
Refer to the above graph for a profit-maximizing monopolist. The firm will set its price at:
0J
A monopoly results in productive inefficiency because at the profit-maximizing output level:
ATC is not at its minimum level
A firm will earn economic profits whenever:
Average revenue exceeds average total costs
Barriers to entry:
Can result from government regulation
Refer to the graph above. If the industry were purely competitive, then the market price would be:
$25, which is lower than what the price would have been if the industry were a monopoly
Refer to the above graph. The firm's marginal revenue curve must be:
Downsloping
Refer to the above graph showing a linear demand curve for a monopolist. In which range of the demand curve (or output quantity) will the firm operate?
Between quantity 0 and S
To practice long-run price discrimination, a monopolist must:
Be able to separate buyers into different markets with different price elasticities
Any activity designed to transfer income or wealth to a particular individual or firm at society's expense is called:
Rent-seeking
Which is not true of price discrimination?
Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly
Refer to the above table for Nina. What is the change in total revenue if she lowers the price from $20 to $18?
$30
Refer to the graph above for an industry. If the industry were purely competitive, the output quantity would be:
160
Within which of the following ranges of output will the firm earn maximum economic profits?
60 to 70 units
Refer to the graph above for an industry. If the industry operates as a pure monopoly, the output quantity would be:
90
Refer to the above graphs of D and MR for a monopolist. Which of the following statements is true?
A price cut from P1 to P2 would lead to an increase in consumer spending on the product
A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than:
Average variable cost
Suppose that a monopolist calculates that at its present output level, marginal cost is $4.00 and marginal revenue is $5.00. The firm could increase profits by:
Decreasing price and increasing output
Assume that a monopolist faces a linear demand curve and that it produces the output quantity where total revenue is maximized. At that output, the price elasticity of demand for the product is:
Equal to one
A non-discriminating monopolist will find that marginal revenue:
Is less than average revenue or price
Assume that a monopolist faces a linear demand curve. If the firm is operating at an output level where marginal revenue is positive, the firm:
Is operating on the elastic portion of its demand curve
Price discrimination is more common in service industries because:
Low price buyers will find it virtually impossible to resell the products of such industries to high price buyers
In the short run equilibrium, a monopolist's profits:
May be positive, negative, or zero
Network effects and simultaneous consumption tend to foster the development of:
Monopoly power
Refer to the above graph showing the revenue curves for a monopolist. If it wants to sell quantity Q1, it must charge a price:
P1
Marginal costs of a producer may be very small due to its product's ability to satisfy a large number of consumers at the same time. This characteristic of a product is called:
Simultaneous consumption
The demand curve confronting a non-discriminating pure monopolist is:
The same as the industry's demand curve
Refer to the above graph. When the total revenue curve reaches a maximum, marginal revenue is:
Zero
