econ quiz 8
10. Refer to the figure above. Assume the market sells 4 units. The marginal revenue of selling the 4th unit, for the monopolist is ______ while for a perfectly competitive firm it is _____.
A. $10; $2 B. $10; $4 C. $4; $10 D. $0; $12
8. Refer to the figure above. At a price of $8 per unit of output the total revenue for the monopolist is ____, and the marginal revenue earned from this last unit sold is ____
A. $8; 8 B. $24; 8 C. $32; 4 D. $40; 0
9. Refer to the demand curve in the figure above. Assume the monopolist equilibrium price is $6 per unit of output. This monopolist will sell _____ units. A perfectly competitive market will sell _____ units and charge ____ price than the monopolist.
A. 6; 6; the same B. more than 6; 6; a higher C. less than 6; more than 6; a lower D. 6; more than 6; a lower
5. Prior to the deal, a 12-ounce can of CheapFizz sold for 75 cents. After the deal you would expect a 12-ounce can of CheapFizz to sell for
A. 75 cents because that is the market price. B. less than 75 cents because CheapFizz will have greater volume and so can sell for a lower price, C. more than 75 cents because demand for CheapFizz will shift to the left. D. more than 75 cents because other firms must exit the market.
14. The hurdle method of price discrimination usually _____ consumer surplus and _____ producer surplus compared to the standard monopoly profit maximizing equilibrium.
A. decreases; increases B. increases; decreases C. decreases; decreases D. increases; increases
3. To sell an extra unit of output, a perfect competitor __________ while an imperfect competitor __________.
A. does not alter price; must lower price B. must hope the market price falls; must lower price C. does not alter price; does not alter price either D. must lower price; must lower price
13. Refer to the figure above. At the socially efficient level of output, the monopolist would
A. earn a profit of $100.10. B. incur a loss of $100.10. C. incur a loss of $61.25. D. incur a loss of $50.05.
12. Refer to the figure above. At the point of profit maximization, the monopolist
A. earns a profit of $38.50. B. incurs a loss of $11.20. C. earns a profit of $11.20. D. incurs a loss of $38.50.
15. The best economic reason to protect the market power of a firm through patent protection is that
A. high profits are important to the strength of a nation's economy. B. without patent protection the market may not exist. C. creating a monopolist will improve the allocation of resources in the economy. D. it is important to continue to employ lawyers.
7. A firm is most likely to experience economies of scale if it has _____ start up costs and ______ marginal costs
A. high; increasing B. high; low C. high; high D. low; decreasing
11. Refer to the figure above. The firm illustrated in the graph is a(n)
A. oligopolist. B. monopolistic competitor. C. perfect competitor. D. natural monopolist.
2. Suppose a firm is collecting $100 in total revenues when it sells 10 units and it receives $110 in total revenues when it sells 11 units. The firm is a(n)
A. pure monopolist. B. oligopolist. C. monopolistic competitor. D. perfect competitor.
1. An imperfectly competitive firm is one
A. that attempts but fails to compete perfectly. B. with the ability to set price at any level it wishes. C. that possesses some degree of control over its price. D. that faces perfectly inelastic demand.
4. In exchange for a share in the revenues earned on campus, State U has granted CheapFizz the exclusive right to sell soft drinks in the student union and in vending machines on campus. Prior to the deal, three soft drink companies sold beverages on campus; now no other soft drink company is allowed to sell its products on campus or at university events. 4. CheapFizz now has market power due to
A. the economies of scale gained by having more sales on campus. B. the grant of a patent. C. the grant of an exclusive license to sell. D. network economies caused by all students consuming their product.
6. The beneficiaries of this deal are _______.
A. the students B. State U C. State U and CheapFizz D. CheapFizz
