LearningCurve - Chapter 13: Monopoly

After Beth does the research for her new app, she learns that she will have 100 power users who would be willing to pay $5 and 400 casual users who would only be willing to pay $2. The marginal cost to provide the app to any one user is constant at $1 and there are no fixed costs. Suppose Beth cannot use price discrimination and she charges a price of $5 to all consumers. The consumer surplus would be _____.

$0

Based on the following graph, when the market is a monopoly, _____ products are sold than would be sold in the perfectly competitive outcome.

1,000 less

Given the graph, a perfectly competitive industry made of profit maximizing firms would produce an output of:

2,000

If the DeBeers diamond monopoly lowers the price of a diamond from $800 to $750 and sales increase from four to five diamonds, the marginal revenue of the fifth diamond is $_____.

550

If James's firm is a monopoly, deadweight loss is $_____.

8

If James's firm were to operate in a perfectly competitive market, the price for a barrel of spring water would be $_____. Please choose the correct answer from the following choices, and then select the submit answer button. 12 6 8 16

8

Given the graph, if the market is a monopoly, deadweight loss is the area:

D

The profit-maximizing output is: Please choose the correct answer from the following choices, and then select the submit answer button. D. zero. J. H.

D

At the profit-maximizing output, profit is the area:

EGAC.

The profit-maximizing rule for the perfectly competitive firm is that it will choose output such that: Please choose the correct answer from the following choices, and then select the submit answer button. MR = ATC. P = AVC. Correct: <i>MR</i> = <i>MC</i>. MR = MC. MR = P.

MR = MC.

Given the graph, a monopolist engaging in perfect price discrimination would:

Produce more than single

If the DeBeers diamond monopoly lowers the price of a diamond from $800 to $750 and sales increase from four to five diamonds, the price effect is a(n):

decrease in total revenue of $200.

True or False: De Beers is a natural monopoly because it controls a scarce natural resource. This is _____.

false

Compared to a perfectly competitive firm, a monopolist in a retail market: Please choose the correct answer from the following choices, and then select the submit answer button. produces more. makes less profit. has higher prices. has less market power.

has higher prices.

For a monopolist, the marginal revenue curve: Please choose the correct answer from the following choices, and then select the submit answer button. lies above the demand curve. is the same as the demand curve. has no relationship to the demand curve. lies below the demand curve.

lies below the demand curve.

The market structure with many firms producing differentiated products is: Please choose the correct answer from the following choices, and then select the submit answer button. perfect competition. oligopoly. monopoly. monopolistic competition.

monopolistic competition.

A pharmaceutical with a patent is an example of a: Please choose the correct answer from the following choices, and then select the submit answer button. natural monopoly. good produced with technological superiority. monopoly protected by a government-created barrier. network externality.

monopoly protected by a government-created barrier.

If James lowers his price from $7 to $6, the net result of the quantity effect and the price effect is: Please choose the correct answer from the following choices, and then select the submit answer button. negative marginal revenue of $3. positive marginal revenue of $3. positive marginal revenue of $63. no change in marginal revenue.

negative marginal revenue of $3.

True monopolies are rare in the modern American economy because: Please choose the correct answer from the following choices, and then select the submit answer button. a few perfectly competitive firms control a large market share in most industries. products produced by oligopolies are superior in quality to those produced by monopoly. consumers refuse to buy monopoly products. of antitrust laws.

of antitrust laws.

The automobile industry is an example of which market structure? Please choose the correct answer from the following choices, and then select the submit answer button. perfect competition monopolistic competition monopoly oligopoly

oligopoly

The tuna fishing industry is an example of which market structure? Please choose the correct answer from the following choices, and then select the submit answer button. monopoly monopolistic competition perfect competition oligopoly

perfect competition

In the market for wheat, there are many farmers selling exactly the same type of wheat. This is an example of: Please choose the correct answer from the following choices, and then select the submit answer button. perfect competition. monopolistic competition. oligopoly. monopoly.

perfect competition.

If James lowers his price from $11 to $10, the net effect of the quantity effect and the price effect is: Please choose the correct answer from the following choices, and then select the submit answer button. positive marginal revenue of $5. negative marginal revenue of $5. positive marginal revenue of $11. zero marginal revenue.

positive marginal revenue of $5.

Compared to a perfectly competitive firm, a monopolist in a retail market: Please choose the correct answer from the following choices, and then select the submit answer button. produces less output. produces more output. hires more workers. hires fewer workers.

produces less output.

The intent of public ownership of a natural monopoly is to: Please choose the correct answer from the following choices, and then select the submit answer button. provide the good and protect consumers' interests. set prices without regard for efficiency concerns. invite more competitors into the industry. guarantee that the firm will earn monopoly profits.

provide the good and protect consumers' interests.

Actual circumstances make the regulation of monopolies: Please choose the correct answer from the following choices, and then select the submit answer button. tricky, because there are trade-offs. impossible, because legally we cannot regulate firms. easy, because all the factors are well known. easy, because monopolies are amenable to regulation.

tricky, because there are trade-offs.

True or False: A perfectly price-discriminating monopolist in this graph would earn more profit than a single-price monopolist.

true

True or False: A single-price monopolist offers its product to all consumers at the same price. This is _____. Please choose the correct answer from the following choices, and then select the submit answer button. true false

true

True or False: The profit-maximizing level of output for a monopolist is the output that generates the greatest difference between total revenue and total cost. This is _____.

true