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104.
Refer to the diagrams. The demand for Firm B's product is
105.
Refer to the diagrams. If $4 is Firm B's profit-maximizing price, its
106.
Economic profit in the long run is
12-63
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Test Bank: I
To p ic: Economic Effects of Monopoly
107.
Which of the following statements is correct?
108.
Confronted with the same unit cost data, a monopolistic producer will charge
109.
An important economic problem associated with pure monopoly is that, at the profit-
maximizing outputs, resources are
12-64
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
Blooms: Understand
Di ff ic ul ty : 02 Medium
Learning Objective: 12-05 Discuss the economic effects of monopoly.
Test Bank: I
To p ic: Economic Effects of Monopoly
110.
A single-price monopoly is economically inefficient because, at the profit-maximizing
output,
111.
If a pure monopolist is producing more output than the MR = MC output,
112.
At its profit-maximizing output, a pure nondiscriminating monopolist achieves
12-65
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
both productive efficiency and allocative efficiency.
C.
productive efficiency but not allocative efficiency.
D.
allocative efficiency but not productive efficiency.
113.
The profit-maximizing output of a pure monopoly is not socially optimal, because in
equilibrium
114.
A single-price pure monopoly is economically inefficient
115.
Comparing a pure monopoly and a purely competitive firm with identical costs, we
would find in long-run equilibrium that the pure monopolist's
116.
Refer to the diagrams. Diagram (A) represents
12-67
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 12-05 Discuss the economic effects of monopoly.
Test Bank: I
To p ic: Economic Effects of Monopoly
Type: Graph
117.
Refer to the diagrams. In diagram (B) the profit-maximizing quantity is
12-68
118.
Refer to the diagrams. With the industry structures represented by diagram
119. (p. $$pageTag$$)
Refer to the diagrams. With the industry structures represented by diagram
120.
Refer to the diagrams. The price will be and the quantity will be with the industry structure
121.
The higher prices charged by monopolists
12-71
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Di ff ic ul ty : 02 Medium
Learning Objective: 12-05 Discuss the economic effects of monopoly.
Test Bank: I
To p ic: Economic Effects of Monopoly
122.
The gains to monopolists from exercising market power
123.
X-inefficiency refers to a situation in which a firm
124.
Which of the following is not a possible source of natural monopoly?
12-72
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Di ff ic ul ty : 02 Medium
Learning Objective: 12-05 Discuss the economic effects of monopoly.
Test Bank: I
To p ic: Economic Effects of Monopoly
125.
There is some evidence to suggest that X-inefficiency is
126.
Refer to the long-run cost curve for a firm. If the firm produces output Q1 at an average total
cost of ATC1, then the firm is
127.
Refer to the long-run cost diagram for a firm. If the firm produces output Q2 at an average
cost of ATC2, then the firm is
12-74
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
C.
incurring X-inefficiency and is failing to produce the output at which all economies of
scale might be realized.
D.
producing that output with the most efficient combination of inputs and is realizing all
existing economies of scale.
128.
Refer to the long-run cost diagram for a firm. If the firm produces output Q2 at an average
cost of ATC3, then the firm is
12-75
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Di ff ic ul ty : 02 Medium
Learning Objective: 12-05 Discuss the economic effects of monopoly.
Test Bank: I
To p ic: Economic Effects of Monopoly
Type: Graph
129.
In which one of the following market models is X-inefficiency most likely to be the
greatest?
130.
In which one of the following market models is X-inefficiency least likely to be present?
131.
Price discrimination refers to
12-76
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written consent of McGraw-Hill Education.
D. the difference between the prices a purely competitive seller and a purely monopolistic
seller would charge.
132.
Which of the following conditions is not required for price discrimination?
133.
The practice of price discrimination is associated with pure monopoly because
134.
Which of the following is not a precondition for price discrimination?
135.
A price discriminating pure monopolist will attempt to charge each buyer (or group of
buyers)
136.
Other things equal, in which of the following cases would economic profit be the
greatest?
12-78
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written consent of McGraw-Hill Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Di ff ic ul ty : 02 Medium
Learning Objective: 12-06 Describe why a monopolist might prefer to charge different prices
in different markets.
Test Bank: I
To p ic: Price Discrimination
137.
If a pure monopolist can price discriminate by separating buyers into two or more
groups,
138.
If a monopolist engages in price discrimination, it will
139.
Price discrimination is
140.
Output
Total Cost
Product Price
0
$250
$500
1
260
300
2
290
150
3
350
200
4
480
150
5
700
100
Based on the accompanying table, how many units would the given profit-maximizing non
discriminating pure monopolist produce?
12-80
141.
Output
Total Cost
Product Price
0
$250
$500
1
260
300
2
290
150
3
350
200
4
480
150
5
700
100
According to the accompanying table, this nondiscriminating pure monopolist should set its
price at
142.
Output
Total Cost
Product Price
0
$250
$500
1
260
300
2
290
150
3
350
200
4
480
150
5
700
100
At its profit-maximizing output, the nondiscriminating pure monopolist whose information is
in the accompanying table
