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Monopoly 3721
74.
Refer to Figure 15-4. The demand curve for a monopoly firm is depicted by curve
a.
A.
b.
B.
c.
C.
d.
D.
75.
Refer to Figure 15-4. The marginal revenue curve for a monopoly firm is depicted by curve
a.
A.
b.
B.
c.
C.
d.
D.
76.
Refer to Figure 15-4. The marginal cost curve for a monopoly firm is depicted by curve
a.
A.
b.
B.
c.
C.
d.
D.
77.
Refer to Figure 15-4. The average total cost curve for a monopoly firm is depicted by curve
a.
A.
b.
B.
c.
C.
d.
D.
78.
Refer to Figure 15-4. If the monopoly firm is currently producing Q4 units of output, then a
decrease in output
will necessarily cause profit to
a.
remain unchanged.
b.
decrease.
c.
increase as long as the new level of output is at least Q2.
d.
None of the above is correct. The monopolist currently maximizing profits at Q4.
79.
Refer to Figure 15-4. If the monopoly firm is currently producing Q3 units of output, then a
decrease in output
will necessarily cause profit to
a.
remain unchanged.
b.
decrease.
c.
increase as long as the new level of output is at least Q2.
d.
increase as long as the new level of output is at least Q1.
80.
Refer to Figure 15-4. Profit can always be increased by increasing the level of output by one
unit if the
monopolist is currently operating at
(i)
Q1.
(ii)
Q2.
(iii)
Q3.
(iv)
Q4.
a.
(ii) only
b.
(i) or (ii) only
c.
(i) only
d.
(i), (ii), or (iii) only
Monopoly 3725
81.
Refer to Figure 15-4. If the monopoly firm wants to maximize its profit, it should operate at a
level of output
equal to
a.
Q1.
b.
Q2.
c.
Q3.
d.
Q4.
82.
Refer to Figure 15-4. Profit will be maximized by charging a price equal to
a.
P5.
b.
P4.
c.
P3.
d.
P1.
83.
Refer to Figure 15-4. A profit-maximizing monopoly's total revenue is equal to
a.
P5 x Q3.
b.
P4 x Q5.
c.
(P5-P3) x Q3.
d.
(P5-P4) x Q3.
Figure 15-5
84.
Refer to Figure 15-5. A profit-maximizing monopoly will produce an output level of
a.
Q1.
b.
Q2.
c.
Q3.
d.
Q4.
85.
Refer to Figure 15-5. A profit-maximizing monopoly will charge a price of
a.
P1.
b.
P2.
c.
P3.
d.
P4.
86.
Refer to Figure 15-5. A profit-maximizing monopoly's total revenue is equal to
a.
P1 x Q1.
b.
P2 x Q3.
c.
P3 x Q4.
d.
(P2-P4) x Q3.
87.
Refer to Figure 15-5. A profit-maximizing monopoly's total cost is equal to
a.
P2 x Q3.
b.
P4 x Q3.
c.
P5 x Q3.
d.
(P2-P5) x Q3.
88.
Refer to Figure 15-5. A profit-maximizing monopoly's profit is equal to
a.
P2 x Q3.
b.
(P2-P4) x Q3.
c.
(P2-P5) x Q3.
d.
(P1-P6) x Q1.
89.
Refer to Figure 15-5. Profit on a typical unit sold for a profit-maximizing monopoly would equal
a.
P1-P6.
b.
P2-P4.
c.
P2-P5.
d.
P2-P3.
90.
Refer to Figure 15-5. At the profit-maximizing level of output,
a.
marginal revenue is equal to P3.
b.
marginal cost is equal to P3.
c.
average revenue is equal to P2.
d.
average total cost is equal to P6.
Figure 15-6
91.
Refer to Figure 15-6. What price will the monopolist charge?
a.
A
b.
C
c.
K
d.
L
92.
Refer to Figure 15-6. How much output will the monopolist produce?
a.
O
b.
T
c.
W
d.
Z
93.
Refer to Figure 15-6. What area measures the monopolist’s profit?
a.
(K-C)*W
b.
(L-A)*T
c.
(K-B)*W
d. 0.5[(K-C)*(Z-T)]
Figure 15-7
94.
Refer to Figure 15-7. In order to maximize profits, the monopolist should produce
a.
9 units.
b.
12 units.
c.
15 units.
d.
more than 15 units.
95.
Refer to Figure 15-7. In order to maximize profits, the monopolist should charge a price of
a. $9.
b.
$12.
c.
$20.
d.
$23.
96.
Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of
a. $81.
b. $144.
c. $225.
d. $240.
97.
Refer to Figure 15-7. A profit-maximizing monopolist would incur total costs of
a. $81.
b. $120.
c. $144.
d. $240.
98.
Refer to Figure 15-7. A profit-maximizing monopolist would earn profits of
a. $96.
b. $117.
c. $120.
d. $126.
Monopoly 3735
Table 15-1
Quantity
Price
Total
Revenue
Average
Revenue
Marginal
Revenue
1
$35
$35
2
$64
$32
$29
3
$29
4
$17
5
$23
$11
6
$120
7
$17
$-1
8
$-7
9
$99
$11
$-13
10
$80
$8
99.
Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it
receive from the
sale?
a. $14
b. $40
c. $112
d. $164
100.
Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its
product should it sell?
a.
4
b.
5
c.
6
d.
8
101.
Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?
a. $17
b. $21
c. $23
d. $26
Monopoly 3737
102.
Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?
a.
$3
b.
$5
c.
$11
d.
$17
103.
Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $12. What quantity
of output (Q) will it
produce and what price (P) will it charge?
a. Q = 4, P = $29
b. Q = 4, P = $26
c. Q = 5, P = $23
d. Q = 7, P = $17
3738 Monopoly
Table 15-2
Tanya has the following demand curve for selling taffy. Assume that Tanya has a marginal cost
of $3 per unit.
Price
Quantity
$10
1
$8
2
$6
3
$4
4
$2
5
104.
Refer to Table 15-2. What is Tanya's profit-maximizing level of output?
a.
1
b.
2
c.
3
d.
4
105.
Refer to Table 15-2. What is Tanya's profit-maximizing price?
a.
$2
b.
$4
c.
$6
d.
$8
Monopoly 3739
Table 15-3
Consider the following demand and cost information for a monopoly.
Quantity
Price
Total Cost
0
$30
$3
1
$25
$7
2
$20
$12
3
$15
$18
4
$10
$25
106.
Refer to Table 15-3. The marginal revenue of the 2nd unit is
a. $10.
b.
$15.
c.
$20.
d.
$25.
107.
Refer to Table 15-3. The marginal cost of the 4th unit is
a. $7.
b.
$12.
c.
$25.
d.
$60.
108.
Refer to Table 15-3. The maximum profit this monopolist can earn is
a. $5.
b.
$15.
c.
$16.
d.
$28.
109.
Refer to Table 15-3. To maximize profit, the monopolist sets price at
a. $10.
b.
$15.
c.
$20.
d.
$25.
