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| 1 | |
A nondiscriminating pure monopolist sells her 10th unit for $20, but must drop her price to $19 to sell 11 units. The marginal revenue of the 11th unit is: |
| | A) | $209 |
| | B) | $20 |
| | C) | $19 |
| | D) | $9 |
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| 2 | |
Answer the next question on the basis of the following table showing the demand schedule facing a nondiscriminating monopolist.
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Refer to the table. If marginal cost is constant and equal to $5, the monopolist will charge a price of: |
| | A) | $7 |
| | B) | $10 |
| | C) | $13 |
| | D) | $16 |
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| 3 | |
Use the following diagram to answer the next question.
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Refer to the diagram. Suppose this industry is initially competitive, but that all the firms merge to become a pure monopoly. The result of the mergers is that output: |
| | A) | falls from Q2 to Q3 and price rises from P2 to P3 |
| | B) | remains the same but price rises from P1 to P3 |
| | C) | falls from Q1 to Q3 and price rises from P1 to P3 |
| | D) | falls from Q2 to Q3 but price remains the same |
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| 4 | |
Use the following diagram to answer the next question.
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Refer to the diagram. At the profit-maximizing output level, this firm: |
| | A) | is incurring a loss |
| | B) | is earning zero profit |
| | C) | is making positive economic profit |
| | D) | may or may not be making a profit; more information is needed |
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| 5 | |
A pure monopolist's demand curve: |
| | A) | is more elastic than the industry demand curve |
| | B) | is typically inelastic at high prices and elastic at low prices |
| | C) | lies everywhere below its marginal revenue curve |
| | D) | is downward sloping |
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| 6 | |
Answer the next question on the basis of the following table showing the demand schedule facing a nondiscriminating monopolist.
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Refer to the data. The marginal revenue of the fourth unit of output is: |
| | A) | $10 |
| | B) | $8 |
| | C) | $4 |
| | D) | $2 |
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| 7 | |
Answer the next question on the basis of the following table showing the demand schedule facing a nondiscriminating monopolist.
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Refer to the data. At the point where 5 units are being sold, demand is: |
| | A) | inelastic |
| | B) | unit elastic |
| | C) | elastic |
| | D) | perfectly elastic |
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| 8 | |
Use the following diagram to answer the next question.
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Refer to the diagram. A regulatory commission that wished to establish a socially optimum output for this firm would set price at: |
| | A) | P2 and the firm would break even |
| | B) | P3 and the firm would earn a profit |
| | C) | P1 but the firm would incur a loss |
| | D) | P2 but the firm would incur a loss |
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| 9 | |
Suppose a single airline services two distinct groups of travelers between two cities. Group A's demand for this flight is relatively more elastic than that of group B's. Compared to charging the single profit-maximizing price, the airline will earn more profits by: |
| | A) | charging more to both groups |
| | B) | charging less to both groups |
| | C) | charging a higher price to group A than to group B |
| | D) | charging a higher price to group B than to group A |
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| 10 | |
Consider two firms in two different industries, each maximizing its profits. Firm A is charging $5 for its output and its marginal revenue is $3. Firm B is charging $4 for its output and its marginal revenue is $4. We can conclude that firm A: |
| | A) | has monopoly power while firm B is a pure competitor |
| | B) | and firm B both have monopoly power |
| | C) | is a pure competitor and firm B has monopoly power |
| | D) | and firm B are both pure competitors |
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