must be cut to $7.00. The marginal revenue of the 21st toy
is
239.
A monopolist sells 6 units of a product per day at a unit price of $15. If it lowers the
price to $14, its total revenue increases by $22. This implies
that its sales quantity increases
by
240.
For a monopolist to sell an output level of 10 units, the price must be $8. MR at this
output level will be
12-142
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written consent of McGraw-Hill Education.
Learning Objective: 12–03 Explain how demand is seen by a pure monopoly.
Test Bank: II
Topic: Monopoly Demand
241.
Demand Data
Cost Data
Price
Quantity Demanded
Output
Total Cost
$2.75
3
3
$4.00
2.50
4
4
4.50
2.25
5
5
4.75
2.00
6
6
5.75
1.75
7
7
7.75
Answer the question on the basis of the demand and cost data for a pure monopolist. The
profit–maximizing price for the monopolist will be
242.
Demand Data
Cost Data
Price
Quantity Demanded
Output
Total Cost
$2.75
3
3
$4.00
2.50
4
4
4.50
2.25
5
5
4.75
2.00
6
6
5.75
1.75
7
7
7.75
Answer the question on the basis of the demand and cost data for a pure monopolist. At
equilibrium, the monopolist will realize a
243.
At the profit–maximizing level of output for a monopolist,
244.
Suppose that a monopolist calculates that at its present output level, marginal revenue is
$1.00 and marginal cost is $2.00. It could maximize profits
or minimize losses by
12-144
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written consent of McGraw-Hill Education.
D i ff i c u lt y: 02 Medium
Learning Objective: 12–04 Explain how a pure monopoly sets its profit-maximizing output and
price.
Test Bank: II
Topic: Output and Price Determination
245.
Many people believe that monopolies charge any price they want to without affecting
sales. In fact, the output and sales level for a profit-
maximizing monopoly is codetermined
with price where
246.
Suppose that a monopolist calculates that at its present output level, marginal cost is
$4.00 and marginal revenue is $5.00. The firm could increase
profits by
247.
The data relate to a pure monopolist and the product it produces. What is the profit-
maximizing output and price for this monopolist?
12-145
Q
TC
0
20
1
24
2
27
3
32
4
40
5
49
6
59
248.
Refer to the graph for a profit–maximizing monopolist. The firm will set its price at
249.
Refer to the graph for a profit–maximizing monopolist. The firm will produce the quantity
12-147
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written consent of McGraw-Hill Education.
D.
0X.
250.
Refer to the graph for a profit–maximizing monopolist. At equilibrium, the firm will be
earning
12-148
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written consent of McGraw-Hill Education.
price.
Test Bank: II
Topic: Output and Price Determination
251.
Pure monopolists
252.
A firm will earn economic profits whenever
253.
The supply curve for a monopoly is
12-149
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written consent of McGraw-Hill Education.
Accessibilit y: Keyboard Navigation
Blooms: Understand
D i ff i c u lt y: 02 Medium
Learning Objective: 12–04 Explain how a pure monopoly sets its profit-maximizing output and
price.
Test Bank: II
Topic: Output and Price Determination
254.
The table shows the relationship between output, total costs, and total revenue for a pure
monopoly.
Output
TC
TR
50
$750
$1,000
60
800
1,100
70
950
1,250
80
1,200
1,450
90
1,300
1,500
Within which of the following ranges of output will the firm earn maximum economic
profits?
255. A profit–maximizing firm should shut down in the short run if the average revenue it
receives is less than
12-150
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written consent of McGraw-Hill Education.
D.
marginal cost.
256.
A profit–maximizing monopolist facing the situation shown in the graph should
12-151
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written consent of McGraw-Hill Education.
Topic: Output and Price Determination
257.
At equilibrium, the profit-maximizing monopolist facing the situation shown in the graph will
face a negative
258.
In the short-run equilibrium, a monopolist‘s profits
259.
In response to a cost-reducing technological breakthrough in the production of its
product, a profit-maximizing monopolist will normally
260.
If marginal costs decrease and the MC curve shifts down, a typical monopolist will
261.
Refer to the graph for a monopolist in short-run equilibrium. This monopolist will charge a
price
262.
Refer to the graph for a monopolist in short-run equilibrium. This monopolist
263.
Refer to the graph for a monopolist in short-run equilibrium. This monopolist has total cost
equal to area
264.
Which of the following does not necessarily apply to a pure monopoly?
12-156
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Accessibilit y: Keyboard Navigation
Blooms: Understand
D i ff i c u lt y: 02 Medium
Learning Objective: 12–04 Explain how a pure monopoly sets its profit-maximizing output and
price.
Test Bank: II
Topic: Output and Price Determination
265.
Which of the following statements is correct?
266.
Under which of the following conditions would a profit-maximizing monopolist
necessarily raise price?
267.
In the graph, what is the profit-maximizing level of output for this pure monopolist?
268.
Refer to the graph. At its equilibrium level of output, this monopolist earns
269.
Monopolists are said to be allocatively inefficient because
12-159
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Blooms: Understand
D i ff i c u lt y: 02 Medium
Learning Objective: 12–05 Discuss the economic effects of monopoly.
Test Bank: II
Topic: Economic Effects of Monopoly
270.
Allocative inefficiency happens in a monopoly because at the profit-maximizing output
level,
271.
A monopoly results in productive inefficiency because at the profit-maximizing output
level,
272.
When compared with the purely competitive industry with identical costs of production,
a monopolist will produce
12-160
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written consent of McGraw-Hill Education.
C.
less output and charge a higher price.
D. less output and charge the same price.
273.
Which is a major criticism of a monopoly as a source of allocative inefficiency?
274.
A nondiscriminating pure monopolist is generally viewed as