Economics Chapter 13 Reference Ref 131 Figure Short run Monopoly Look

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Answer P = ATC.

81. Multiple Choice: A monopolist’s marginal cost curve sh…

Question A monopolist‘s marginal cost curve shifts up, but the firm’s demand curve remains

the same and the firm does not shut down. Compared to the condition before the

increase in marginal costs, the monopolist will ________ its price and ________ its

level of production.

lower; increase

82. Multiple Choice: Suppose a monopoly is producing at th...

Question Suppose a monopoly is producing at the level of output where marginal revenue

equals marginal cost. If the monopolist reduces output, it:

can charge a higher price and it will increase profits.

83. Multiple Choice: Suppose a monopoly is producing at th...

Question Suppose a monopoly is producing at the profit-maximizing level of output. At that

level of output:

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price is less than marginal cost.

84. Multiple Choice: A monopoly is producing at the output...

Question A monopoly is producing at the output level where average total cost equals $30,

marginal revenue is $40, and the price is $50. If ATC is at its minimum level and

the ATC curve is U-shaped, in order to maximize profits this firm should:

85. Multiple Choice: If a monopolist is producing a quanti...

Question If a monopolist is producing a quantity that generates MC = P, then profit:

Answer is maximized.

86. Multiple Choice: If a monopolist is producing a quanti...

Question If a monopolist is producing a quantity that generates MC > MR, then profit:

Answer is maximized.

87. Multiple Choice: Which of the following is true?

Question Which of the following is true?

Answer Profit-maximizing behavior occurs only in perfectly competitive markets.

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88. Multiple Choice: A monopolist responds to an increase ...

Question A monopolist responds to an increase in demand by ________ price and ________

output.

Answer increasing; decreasing

89. Multiple Choice: A monopolist responds to a decrease i...

Question A monopolist responds to a decrease in demand by ________ price and ________

output.

Answer increasing; decreasing

90. Multiple Choice: A monopolist responds to an increase ...

Question A monopolist responds to an increase in marginal cost by ________ price and

________ output.

decreasing; decreasing

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91. Multiple Choice: A monopoly responds to a decrease in …

Question A monopoly responds to a decrease in marginal cost by ________ price and

________ output.

Answer increasing; decreasing

92. Multiple Choice: The GoSports Company is a profit-maxi...

Question The GoSports Company is a profit-maximizing firm with a monopoly in the

production of school team pennants. The firm sells its pennants for $10 each. We

can conclude that GoSports is producing a level of output at which:

Answer average total cost equals $10.

93. Multiple Choice: Suppose that a profit-maximizing mono…

Question Suppose that a profit-maximizing monopoly firm undergoes a substantial

technological change that reduces its marginal and average total costs by $40. If in

response to its reduction in cost the firm changes its price in a profit-maximizing

way, then we can predict that its total economic profit will:

Answer fall.

94. Multiple Choice: Suppose that a profit-maximizing mono…

Question Suppose that a profit-maximizing monopoly firm undergoes a substantial

technological change that reduces its marginal and average total costs by $40. If in

response to its reduction in cost the firm changes its price in a profit-maximizing

way, then we can predict that its total output will:

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It is not possible to make a determination from the information given.

95. Multiple Choice: Suppose that a monopoly firm is requi…

Question Suppose that a monopoly firm is required to pay a new annual license fee just for

the privilege of doing business in its city and that the fee is somewhat less than the

economic profit the firm is now earning. In response to the increase in fees, the firm

will:

Answer raise its price by less than the amount of the license fee.

96. Multiple Choice: An increase in the fixed costs of a m...

Question An increase in the fixed costs of a monopoly firm would ________ price and

________ quantity in the short run.

Answer increase; decrease

97. Multiple Choice: If a monopolist is producing a quanti...

Question If a monopolist is producing a quantity that generates MC > MR, then profit:

Answer is maximized.

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98. Multiple Choice: If a monopolist is producing a quanti...

Question If a monopolist is producing a quantity that generates MC < MR, then profit:

Answer is maximized.

99. Multiple Choice: If a monopolist is producing a quanti...

Question If a monopolist is producing a quantity that generates MC = MR, then profit:

can be increased by decreasing production.

100. Multiple Choice: Suppose that the Yankee Cap Company i...

Question Suppose that the Yankee Cap Company is a profit-maximizing firm that has a

monopoly in the production of baseball caps. The firm sells its baseball caps for

$25 each. For this information, we can assume that the Yankee Cap Company is

producing a level of output at which:

Answer marginal revenue equals $25.

101. Multiple Choice: Figure: Short-Run Monopoly Reference:...

Question

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Figure: Short-Run Monopoly

Reference: Ref 13-1

(Figure: Short-Run Monopoly) Look at the figure Short–Run Monopoly. The profit–

maximizing rule is satisfied by the intersection at point:

Answer G.

102. Multiple Choice: Figure: Short-Run Monopoly Reference:...

Question

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Figure: Short-Run Monopoly

Reference: Ref 13-1

(Figure: Short-Run Monopoly) Look at the figure Short–Run Monopoly. The profit–

maximizing quantity of output is quantity:

Answer Q.

103. Multiple Choice: Figure: Short-Run Monopoly Reference:...

Question

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Figure: Short-Run Monopoly

Reference: Ref 13-1

(Figure: Short-Run Monopoly) Look at the figure Short–Run Monopoly. The profit–

maximizing price is price:

104. Multiple Choice: Figure: Short-Run Monopoly Reference:...

Question

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Figure: Short-Run Monopoly

Reference: Ref 13-1

(Figure: Short-Run Monopoly) Look at the figure Short–Run Monopoly. The marginal

cost of producing the profit-maximizing quantity is cost:

Answer N.

105. Multiple Choice: The monopoly firm‘s profit-maximizing…

Question The monopoly firm’s profit-maximizing price is:

Answer given by the point on the ATC curve for the profit–maximizing quantity.

106. Multiple Choice: Compared to a perfectly competitive i...

Question Compared to a perfectly competitive industry, a monopolist:

Answer produces a large quantity.

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107. Multiple Choice: Bob owns a trout farm with monopoly p…

Question Bob owns a trout farm with monopoly power in North Carolina. Bob’s optimal output

occurs where marginal revenue ________. Because of monopoly power, Bob‘s

supply curve ________.

exceeds marginal cost; is perfectly inelastic

108. Multiple Choice: Which of the following statements abo…

Question Which of the following statements about monopoly equilibrium and perfectly

competitive equilibrium is incorrect?

Answer Price is greater than marginal cost in monopoly, and price equals marginal

cost in perfect competition.

109. Multiple Choice: Figure: Perfect Competition Reference…

Question

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Figure: Perfect Competition

Reference: Ref 13-2

(Figure: Perfect Competition) Look at the figure Perfect Competition. In the figure, a

perfect competitor will produce at:

Answer the intersection of marginal revenue and marginal cost.

110. Multiple Choice: A statement that best reflects an eva...

Question A statement that best reflects an evaluation of monopoly firms is that:

competition should replace all monopolies.

111. Multiple Choice: In perfect competition, the firm prod…

Question In perfect competition, the firm produces the output such that ________, and in

monopoly, the firm produces the output such that ________.

Answer P > MR = MC; P = MR = MC

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112. Multiple Choice: Which of the following is true?

Question Which of the following is true?

Monopolies tend to charge lower prices than perfectly competitive firms.

113. Multiple Choice: The profit-maximizing rule MR = MC is:

Question The profit-maximizing rule MR = MC is:

Answer followed by a monopoly but not by a perfectly competitive firm.

114. Multiple Choice: If a change in fixed cost raises aver…

Question If a change in fixed cost raises average total cost above the demand curve:

Answer price and output will remain unchanged.

115. Multiple Choice: Figure: A Profit-Maximizing Monopoly ...

Question

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Figure: A Profit-Maximizing Monopoly Firm

Reference: Ref 13-3

(Figure: A Profit-Maximizing Monopoly Firm) Look at the figure A Profit–Maximizing

Monopoly Firm. The firm in this figure will produce ________ units of output per

week.

Answer 160

116. Multiple Choice: Figure: A Profit-Maximizing Monopoly ...

Question

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Figure: A Profit-Maximizing Monopoly Firm

Reference: Ref 13-3

(Figure: A Profit-Maximizing Monopoly Firm) Look at the figure A Profit–Maximizing

Monopoly Firm. This firm’s cost per unit at its profit-maximizing quantity is:

Answer $8.

117. Multiple Choice: Figure: A Profit-Maximizing Monopoly ...

Question

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Figure: A Profit-Maximizing Monopoly Firm

Reference: Ref 13-3

(Figure: A Profit-Maximizing Monopoly Firm) Look at the figure A Profit–Maximizing

Monopoly Firm. This firm’s price per unit is:

Answer $20.

118. Multiple Choice: Figure: A Profit-Maximizing Monopoly ...

Question

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Figure: A Profit-Maximizing Monopoly Firm

Reference: Ref 13-3

(Figure: A Profit-Maximizing Monopoly Firm) Look at the figure A Profit–Maximizing

Monopoly Firm. This firm’s profit per unit is:

Answer $5.

119. Multiple Choice: In the short run, a monopoly will sto…

Question In the short run, a monopoly will stop producing if:

Answer P < ATC.

120. Multiple Choice: In a monopoly in the long run:

Question In a monopoly in the long run:

Answer economic profits will be eliminated by the entry of rival firms.

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121. Multiple Choice: Reference: Ref 13-4 (Table: Demand a...

Question

Reference: Ref 13-4

(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia

runs a natural monopoly producing electricity for a small mountain village. The table

shows Lenoia’s demand and total cost of producing electricity. The price effect of

increasing production from 3 megawatts to 4 megawatts is:

–$50.

122. Multiple Choice: Reference: Ref 13-4 (Table: Demand a...

Question

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Reference: Ref 13-4

(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia

runs a natural monopoly firm producing electricity for a small mountain village. The

table shows Lenoia’s demand and total cost of producing electricity. To maximize

profits, Lenoia should charge a price of:

Answer $350.

123. Multiple Choice: Reference: Ref 13-4 (Table: Demand a...

Question

Reference: Ref 13-4

(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia

runs a natural monopoly producing electricity for a small mountain village. The table

shows Lenoia’s demand and total cost of producing electricity. The marginal

revenue of the fourth unit of production is:

Answer $200.

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124. Multiple Choice: Reference: Ref 13-4 (Table: Demand a...

Question

Reference: Ref 13-4

(Table: Demand and Total Cost) Look at the table Demand and Total Cost. Lenoia

runs a natural monopoly producing electricity for a small mountain village. The table

shows Lenoia’s demand and total cost of producing electricity. The profit–

maximizing quantity of electricity for her to produce is:

Answer 2 megawatts.

125. Multiple Choice: Reference: Ref 13-4 (Table: Demand a...

Question

Points: 0