Question 1

Explain why the monopolist has no supply curve?

Accepted Answer

A supply curve that shows the relationsh...

Question 2

Table 15-1
 
 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1.
-Refer to Table 15-1.What is the firm's profit-maximizing output and what is the price charged to sell this output?

Accepted Answer

A)   P = $85; Q = 10
B)   P = $80; Q = 11
C)   P = $70; Q = 13
D)   P = $65; Q = 14E) All of the above
F) A) and C)

Question 3

Compared to perfect competition,the consumer surplus in a monopoly

Accepted Answer

A)   is unchanged because price and output are the same.
B)   is lower because price is higher and output is lower.
C)   is higher because price is higher and output is the same.
D)   is eliminated.E) All of the above
F) C) and D)

Question 4

The De Beers Company,one of the longest-lived monopolies,is facing increasing competition.One source of competition comes from people who might resell their previously owned diamonds.Why is De Beers worried that people might resell their previously owned diamonds?

Accepted Answer

A)   because De Beers will not be able to guarantee the quality of previously owned diamonds and fears that its reputation might be harmed
B)   because the availability of previously owned diamonds would increase the market demand for diamonds and dilute De Beers' monopoly
C)   because previously owned diamonds would be a close substitute to newly mined diamonds and therefore reduce De Beers' market power
D)   because the availability of previously owned diamonds would make the market demand curve for diamonds more inelastic and force De Beers to lower its priceE) B) and D)
F) B) and C)

Question 5

The Ecke's family virtual monopoly on commercial poinsettia production by grafting together two varieties of the plant ended around 1996 when university researchers were able to independently make the same discovery.The Ecke family did not patent their grafting process.Would the Ecke's have been better off if they had patented their process of growing poinsettias?

Accepted Answer

A)   Yes, it would have allowed them to earn economic profits indefinitely.
B)   That depends on how long they had a monopoly before university researchers made the discovery. If the discovery was made after the period of time when patents expire, then the Ecke family is not any better off.
C)   No, even with a patent protection, the Ecke family cannot prevent government-funded academic institutions from researching into plant breeding.
D)   No, seeking patent protection necessitates divulging enough information that would enable others to information to discover ways of grafting poinsettias that were similar to the Ecke method but that did not violate the patent.E) None of the above
F) C) and D)

Question 6

Which of the following statements is consistent with the views of Joseph Schumpeter?

Accepted Answer

A)   Research and development by competitive firms is responsible for most technological changes.
B)   An economy benefits from firms having market power because these firms are more likely to be able to commit funds for research and development.
C)   Enforcement of antitrust laws is necessary to promote competition among firms.
D)   A lack of competition discourages firms from developing new technologies.E) B) and C)
F) A) and D)

Question 7

Figure 15-3  Figure 15-3 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-3.What is likely to happen to this monopoly in the long run?

Accepted Answer

A)   New firms will enter the market to eliminate its profits.
B)   It will expand its output to take advantage of economies of scale so as to further increase its profit.
C)   As long as there are entry barriers, this firm will continue to enjoy economic profits.
D)   It will be regulated by the government because of its excess profits.E) A) and B)
F) A) and D)

Question 8

A profit maximizing monopoly's price is

Accepted Answer

A)   the same as the price that would prevail if the industry was perfectly competitive.
B)   less than the price that would prevail if the industry was perfectly competitive.
C)   greater than the price that would prevail if the industry was perfectly competitive.
D)   not consistently related to price that would prevail if the market was perfectly competitive.E) B) and C)
F) B) and D)

Question 9

Figure 15-7  
In 2011, Verizon was granted permission to enter the market for cable TV in Upstate New York, ending the virtual monopoly that Time Warner Cable had in most local communities in the region. Figure 15-7 shows the cable television market in Upstate New York.
-Refer to Figure 15-7.Following the entry of Verizon,the subscription price falls from PM to PC.What is the increase in consumer surplus as a result of this change?

Accepted Answer

A)   the area A + B + C
B)   the area B + C
C)   the area D + F
D)   the area B + C + DE) All of the above
F) None of the above

Question 10

Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's,a Taco Bell and a Kentucky Fried Chicken.Using a broad definition of a monopoly,Joe has a monopoly.

Accepted Answer

A) True 
 B)False

Question 11

The size of a deadweight loss in a market is reduced by

Accepted Answer

A)   government legislating a ceiling price.
B)   government legislating a price floor.
C)   market price being close to marginal cost.
D)   creative destruction.E) All of the above
F) B) and C)

Question 12

What happens to a monopoly's revenue when it sells more units of its product?

Accepted Answer

The monopolist must lower its price to s...

Question 13

Table 15-1
 
 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1.
-Refer to Table 15-1.What is the amount of the firm's profit?

Accepted Answer

A)   $335
B)   $350
C)   $880
D)   $910E) C) and D)
F) None of the above

Question 14

Figure 15-6 1P2EF. D)  area P1P2GF." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 15-6.Compared to a perfectly competitive market,consumer surplus is lower in a monopoly by an amount equal to the

Accepted Answer

A)   area FHE.
B)   area FGE.
C)   area P1P2EF.
D)   area P1P2GF.E) None of the above
F) A) and C)

Question 15

Figure 15-3  Figure 15-3 shows the demand and cost curves for a monopolist.
-Refer to Figure 15-3.What is the amount of the monopoly's profit?

Accepted Answer

A)   $2,700
B)   $4,200
C)   $10,400
D)   $12,600E) A) and D)
F) A) and C)

Question 16

How do the price and quantity of a monopoly compare to that of a perfectly competitive industry?

Accepted Answer

A monopolist sells a smaller q...

Question 17

Which one of the following about a monopoly is false?

Accepted Answer

A)   A monopoly could make profits in the long run.
B)   A monopoly could break even in the long run.
C)   A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly.
D)   A monopoly status could be temporary.E) A) and B)
F) A) and C)

Question 18

Long-run economic profits would most likely exist in which market structure?

Accepted Answer

A)   monopoly, monopolistic competition and oligopoly
B)   monopoly and oligopoly
C)   monopoly and monopolistic competition
D)   monopoly onlyE) A) and D)
F) B) and C)

Question 19

Market power in the United States causes a huge loss of economic efficiency.

Accepted Answer

A) True 
 B)False

Question 20

Suppose that a perfectly competitive industry becomes a monopoly.What effect will this have on consumer surplus,producer surplus,and deadweight loss?

Accepted Answer

If a perfectly competitive ind...

Exam 15: Monopoly and Antitrust Policy

Figure 15-6 -Refer to Figure 15-6.Compared to a perfectly competitive market,consumer surplus is lower in a monopoly by an amount equal to the

Correct Answer
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Which one of the following about a monopoly is false?

Correct Answer
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How do the price and quantity of a monopoly compare to that of a perfectly competitive industry?

Correct Answer
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A monopolist sells a smaller q...
View Answer

Compared to perfect competition,the consumer surplus in a monopoly

Correct Answer
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What happens to a monopoly's revenue when it sells more units of its product?

Correct Answer
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The monopolist must lower its price to s...
View Answer

Figure 15-3 Figure 15-3 shows the demand and cost curves for a monopolist. -Refer to Figure 15-3.What is likely to happen to this monopoly in the long run?

Correct Answer
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Market power in the United States causes a huge loss of economic efficiency.

Correct Answer
verified

Explain why the monopolist has no supply curve?

Correct Answer
verified
A supply curve that shows the relationsh...
View Answer

Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's,a Taco Bell and a Kentucky Fried Chicken.Using a broad definition of a monopoly,Joe has a monopoly.

Correct Answer
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A profit maximizing monopoly's price is

Correct Answer
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Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. -Refer to Table 15-1.What is the amount of the firm's profit?

Correct Answer
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Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. -Refer to Table 15-1.What is the firm's profit-maximizing output and what is the price charged to sell this output?

Correct Answer
verified

Suppose that a perfectly competitive industry becomes a monopoly.What effect will this have on consumer surplus,producer surplus,and deadweight loss?

Correct Answer
verified
If a perfectly competitive ind...
View Answer

Which of the following statements is consistent with the views of Joseph Schumpeter?

Correct Answer
verified

Correct Answer
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Long-run economic profits would most likely exist in which market structure?

Correct Answer
verified

The De Beers Company,one of the longest-lived monopolies,is facing increasing competition.One source of competition comes from people who might resell their previously owned diamonds.Why is De Beers worried that people might resell their previously owned diamonds?

Correct Answer
verified

The size of a deadweight loss in a market is reduced by

Correct Answer
verified

Figure 15-3 Figure 15-3 shows the demand and cost curves for a monopolist. -Refer to Figure 15-3.What is the amount of the monopoly's profit?

Correct Answer
verified

Correct Answer
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Exam 15: Monopoly and Antitrust Policy

Figure 15-6 -Refer to Figure 15-6.Compared to a perfectly competitive market,consumer surplus is lower in a monopoly by an amount equal to the

Correct AnswerverifiedShow Answer

Which one of the following about a monopoly is false?

Correct AnswerverifiedShow Answer

How do the price and quantity of a monopoly compare to that of a perfectly competitive industry?

Correct AnswerverifiedA monopolist sells a smaller q...View AnswerShow Answer

Compared to perfect competition,the consumer surplus in a monopoly

Correct AnswerverifiedShow Answer

What happens to a monopoly's revenue when it sells more units of its product?

Correct AnswerverifiedThe monopolist must lower its price to s...View AnswerShow Answer

Figure 15-3 Figure 15-3 shows the demand and cost curves for a monopolist. -Refer to Figure 15-3.What is likely to happen to this monopoly in the long run?

Correct AnswerverifiedShow Answer

Market power in the United States causes a huge loss of economic efficiency.

Correct AnswerverifiedShow Answer

Explain why the monopolist has no supply curve?

Correct AnswerverifiedA supply curve that shows the relationsh...View AnswerShow Answer

Joe Santos owns the only pizza parlor in a small town that is also home to a McDonald's,a Taco Bell and a Kentucky Fried Chicken.Using a broad definition of a monopoly,Joe has a monopoly.

Correct AnswerverifiedShow Answer

A profit maximizing monopoly's price is

Correct AnswerverifiedShow Answer

Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. -Refer to Table 15-1.What is the amount of the firm's profit?

Correct AnswerverifiedShow Answer

Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. -Refer to Table 15-1.What is the firm's profit-maximizing output and what is the price charged to sell this output?

Correct AnswerverifiedShow Answer

Suppose that a perfectly competitive industry becomes a monopoly.What effect will this have on consumer surplus,producer surplus,and deadweight loss?

Correct AnswerverifiedIf a perfectly competitive ind...View AnswerShow Answer

Which of the following statements is consistent with the views of Joseph Schumpeter?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Long-run economic profits would most likely exist in which market structure?

Correct AnswerverifiedShow Answer

The De Beers Company,one of the longest-lived monopolies,is facing increasing competition.One source of competition comes from people who might resell their previously owned diamonds.Why is De Beers worried that people might resell their previously owned diamonds?

Correct AnswerverifiedShow Answer

The size of a deadweight loss in a market is reduced by

Correct AnswerverifiedShow Answer

Figure 15-3 Figure 15-3 shows the demand and cost curves for a monopolist. -Refer to Figure 15-3.What is the amount of the monopoly's profit?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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A monopolist sells a smaller q...
View Answer

Correct Answer
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Correct Answer
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The monopolist must lower its price to s...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
verified
A supply curve that shows the relationsh...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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If a perfectly competitive ind...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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