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Chapter 10 Test Bank Key
1. If a firm can change market prices by altering its output, then it
2. Market power is
A. A characteristic of all market structures.
3. If the entire output of a market is produced by a single seller, the firm
A. Is a monopoly.
4. Which of the following is likely to be a monopolist?
5. Which of the following is true for a monopolist?
6. Monopolists are price
7. A monopolist has market power because it
A. Faces a downward-sloping demand curve for its own output.
8. Both a competitive industry and a monopoly
9. If a firm can raise market price by reducing its output,
then A. It has no market power.
10. A monopolist will find that its marginal revenue curve
A. Is the same as its demand curve.
11. For a monopolist, marginal revenue equals
12. The marginal revenue of a monopolist falls below price because the firm
13. The marginal revenue curve is below the demand curve
A. If a firm must lower its price to sell additional output.
14. The marginal revenue of a monopolist
15. Suppose a monopoly firm produces bicycles and can sell 10 bicycles per month at a price of $700 per
bicycle. In order to increase sales by one bicycle per month, the monopolist must lower the price of its
bicycles by $50 to $650 per bicycle. The marginal revenue of the 11th bicycle is
16. Suppose a monopoly concrete contractor builds 20 driveways per month for $10,000 each. In order to increase
sales to 21 driveways, the contractor must lower the price of driveways to $9,500. The marginal revenue of the
21st driveway is
A. $500.
17. In monopoly and perfect competition, a firm should expand production when
18. Monopolists set prices
19. Which of the following rules is satisfied when a monopoly maximizes profits?
20. If a monopolist is producing a level of output where MR exceeds MC, then it should
21. If a monopolist is producing a level of output where MR is less than MC, then it should
A. Shift its marginal cost curve upward.
22. Which of the following is true about the output level where marginal revenue equals marginal cost?
23. Which of the following would definitely not be used by any unregulated monopolist?
24. Which of the following statements is not correct?
25. Which of the following is the same for monopoly and competition under the same cost and demand conditions?
26. A profit-maximizing monopolist produces the rate of output where
A. MR = MC and determines price based on the demand curve.
27.
In Table 24.1, using the profit maximization rule, a monopolist will produce
28.
In Table 24.1, using the profit maximization rule, a monopolist will charge a price of
29.
In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, marginal
revenue is
30.
In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output marginal, cost is
31.
In Table 24.1, using the profit maximization rule, a monopolist that is able to practice price discrimination will
charge
32.
In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, the
average total cost is
33.
In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, total revenue is
34.
In Table 24.1, according to the profit maximization rule, at the profit-maximizing level of output, total cost is
35.
In Table 24.1, the maximum profit that can be achieved is
36.
In Table 24.1, marginal revenue at the profit-maximizing level of output is
37.
The profit-maximizing rate of output in Figure 24.1 is
38.
In Figure 24.1, the profit-maximizing monopolist will charge a price of
39.
In Figure 24.1, total revenue is represented by the area
40.
The shaded area in Figure 24.1 represents
41.
In Figure 24.1 total cost is represented by the area
42.
In Figure 24.1, total profit is represented by the area
43.
In Figure 24.2, the profit-maximizing level of output is
44.
In Figure 24.2, a profit-maximizing monopolist will charge a price of
