Deck 9: Monopoly

Question 1

Which of the following describes a monopolized market structure?

A)a market structure with a single buyer
B)many firms with no control over price producing identical products with no differentiation
C)a few firms with some control over price producing similar products that are close substitutes
D)a few firms with no control over price producing highly differentiated products
E)a single firm producing a highly differentiated product and serving the entire market

Answer 1

E

Question 2

A natural monopoly forms when a firm has _____

A)a license.
B)a patent.
C)a U-shaped long-run average cost curve.
D)a downward-sloping long-run average cost curve.
E)a right to exclusively use a natural resource.

Answer 2

D

Question 3

Which of the following is true of a patent in the United States?

A)It reduces a firm's incentive to develop new products.
B)It is issued in recognition of new works of art or literature.
C)It gives a firm a permanent exclusive right to produce a particular good.
D)It gives a firm a temporary exclusive right to produce a particular good.
E)It guarantees economic profits to a firm in the long run.

Answer 3

D

Question 4

A monopoly is the _____ supplier in the market,but there are _____ demanders.

A)only; many
B)only; a few
C)only; only one
D)one of the many; only one
E)one of the many; a few

Question 5

Patents stimulate investment _____

A)by giving inventors an incentive to incur the up-front costs of developing new products.
B)by giving tax breaks to inventors and researchers.
C)by guaranteeing an economic profit to a firm from the sale of a new product.
D)by lowering interest rates on loans taken for developing a new product.
E)by covering the total cost of research and development incurred by a start-up firm.

Question 6

A natural monopoly forms when _____

A)small firms merge to form larger firms.
B)one firm has control over the entire supply of a basic input required to produce the product.
C)one firm's monopoly position is created and enforced by the government.
D)one firm receives patent protection for certain basic production processes.
E)the long-run average cost incurred by a firm declines as the firm expands output.

Question 7

A monopolist's demand curve is _____

A)its marginal cost curve.
B)its marginal revenue curve.
C)identical to its market demand curve.
D)the same as the demand curve faced by a firm in perfect competition.
E)the same as its average cost curve.

Question 8

Which of the following prevents potential competitors from entering a monopolized market?

A)legal restrictions
B)diseconomies of scale
C)product differentiation
D)stable market demand
E)an abundant supply of resources

Question 9

A monopolist's demand curve is _____

A)horizontal.
B)vertical.
C)downward sloping.
D)upward sloping.
E)different from the market demand curve.

Question 10

Which of the following is not an example of a government monopoly?

A)a state-owned liquor store
B)the U.S. Postal Service
C)FedEx
D)a petroleum company owned by the nation
E)a government-owned utility

Question 11

Which of the following is not a natural monopoly?

A)De Beers Consolidated Mines
B)pandas from China
C)professional sports leagues
D)Starbucks
E)Alcoa in the 1900s

Question 12

Exhibit 9.1

Refer to Exhibit 9.1,which shows the long-run average cost of a firm.The downward-sloping long-run average cost curve indicates the firm is _____

A)a technological monopoly.
B)a natural monopoly.
C)a government-created monopoly.
D)an economic monopoly.
E)a geographic monopoly.

Question 13

Exhibit 9.1

Refer to Exhibit 9.1,which shows the long-run average cost of a firm.The downward-sloping long-run average cost curve indicates a monopoly characterized by which type of barrier to entry?

A)legal restrictions
B)economies of scale
C)control of an essential resource
D)innovation
E)patented technology

Question 14

The demand curve a monopolist faces is _____

A)the same as the demand curve facing a perfectly competitive firm.
B)positively sloped, as it produces a highly differentiated product.
C)vertical, as there are no close substitutes for its product.
D)the same as the market demand curve.
E)perfectly price inelastic.

Question 15

Identify a distinguishing feature of a monopoly.

A)There are no barriers to entry in a monopolized market.
B)A monopolist is a price taker.
C)There are no close substitutes for a monopolist's product.
D)There are many firms in a monopolized industry.
E)A monopolist faces a horizontal demand curve.

Question 16

Which of these is likely to be true of perfect competition but not of monopoly?

A)A firm can produce a good only if government licenses authorize it to produce the good.
B)A firm can sell a good in the market only if the government grants a patent to the firm.
C)A firm can earn economic profit in the long run.
D)A firm can shut down in the short run only if the price charged by it exceeds the average variable cost of production.
E)A firm can face competition from new entrants into the market in the long run.

Question 17

Governments often confer monopoly status by _____

A)allowing firms to sell a particular good or service domestically.
B)prohibiting any firm from selling a particular good or service internationally.
C)awarding several firms the right to supply a particular good or service.
D)prohibiting any firm from supplying a particular good or service.
E)awarding an individual firm the exclusive right to supply a particular good or service.

Question 18

Exhibit 9.1

Refer to Exhibit 9.1,which shows the long-run average cost of a firm.The downward-sloping long-run average cost curve indicates that this firm can supply market demand _____

A)at a lower average cost per unit than two or more firms each producing a smaller amount of output.
B)at a lower average cost per unit than two or more firms each producing a larger amount of output.
C)at a higher average cost per unit than two or more firms each producing a larger amount of output.
D)at a higher average cost per unit than two or more firms each producing a smaller amount of output.
E)at the same average cost per unit as two or more firms each producing a larger amount of output.

Question 19

Which of the following is most likely to be considered a natural monopoly?

A)a municipal water company
B)the mobile telephone industry
C)the baby care product industry
D)the cotton textile industry
E)the automobile industry

Question 20

Restrictions on the entry of new firms into an industry are called _____

A)substitutes.
B)barriers to entry.
C)price takers.
D)synergies.
E)economies of scope.

Question 21

Which of the following is true of the marginal revenue earned by a non-price discriminating monopolist that charges a single price?

A)The marginal revenue earned by a monopoly is equal to the average cost it incurs.
B)The marginal revenue earned by a monopoly is more than the price of its product.
C)The marginal revenue earned by a monopoly is less than the price of its product.
D)The marginal revenue earned by a monopoly is equal to the average revenue it earns.
E)The marginal revenue earned by a monopoly is equal to the price of its product.

Question 22

Table 9.2
$\begin{array}{ll}\text { Price }(\$) & \text { Quantity Demanded } \\\hline 50 & 2 \\40 & 3 \\30 & 4 \\20 & 5 \\10 & 6\end{array}$

-Refer to Table 9.2.Marginal revenue from the sixth unit of output is _____

A)$10.
B)$60.
C)$100.
D)$40.
E)?$40.

Question 23

Table 9.2
$\begin{array}{ll}\text { Price }(\$) & \text { Quantity Demanded } \\\hline 50 & 2 \\40 & 3 \\30 & 4 \\20 & 5 \\10 & 6\end{array}$

-Refer to Table 9.2.Total revenue from selling 5 units is _____

A)$20.
B)$140.
C)$100.
D)$10.
E)$5.

Question 24

Table 9.3
$\begin{array}{llcc} \text { Quantity } &\text { Price (\$)} \\\hline0 &7\\ 1&6\\2&5\\ 3&4\\ 4&3\\5&2\\6&1\end{array}$


-Refer to Table 9.3.Identify the range of output for which demand is unit elastic.

A)1 unit to 2 units
B)2 units to 3 units
C)3 units to 4 units
D)4 units to 5 units
E)5 units to 6 units

Question 25

Table 9.3
$\begin{array}{llcc} \text { Quantity } &\text { Price (\$)} \\\hline0 &7\\ 1&6\\2&5\\ 3&4\\ 4&3\\5&2\\6&1\end{array}$


-Refer to Table 9.3.The average revenue earned by the firm from four units of output is _____

A)$12.
B)$3.
C)$4.
D)?$4.
E)$0.

Question 26

The demand curve facing a non-discriminating monopolist _____

A)is the same as its average revenue curve.
B)is perfectly price elastic.
C)is perfectly price inelastic.
D)lies above its average revenue curve.
E)lies below its marginal revenue curve.

Question 27

Table 9.2
$\begin{array}{ll}\text { Price }(\$) & \text { Quantity Demanded } \\\hline 50 & 2 \\40 & 3 \\30 & 4 \\20 & 5 \\10 & 6\end{array}$

-Refer to Table 9.2.Marginal revenue from the third unit of output is _____

A)$20.
B)$120.
C)$100.
D)$40.
E)$0.

Question 28

China is a monopoly supplier of pandas to the world's zoos and rents out a pair of pandas for $1 million a year.Suppose China lowers the price and rents out more pairs of pandas.What would happen to average revenue?

A)The average revenue curve would shift leftward.
B)The average revenue curve would shift rightward.
C)Average revenue would decrease.
D)Average revenue would increase.
E)Average revenue will stay the same.

Question 29

Table 9.3
$\begin{array}{llcc} \text { Quantity } &\text { Price (\$)} \\\hline0 &7\\ 1&6\\2&5\\ 3&4\\ 4&3\\5&2\\6&1\end{array}$


-Refer to Table 9.3.Marginal revenue from the fourth unit of output is _____

A)$12.
B)$3.
C)$4.
D)?$4.
E)$0.

Question 30

China is a monopoly supplier of pandas to the world's zoos and rents out a pair of pandas for $1 million a year.As a monopolist,what must China do if it wants to rent out more pairs of pandas?

A)Increase the price.
B)Decrease the price.
C)Keep the price the same.
D)Allow international zoos to breed pandas and keep them.
E)Breed more pandas in China and rent them at the same price.

Question 31

Table 9.1
$$\begin{array} { | c | c | c | c | } \hline \text { Quantity } & \text { Price } ( \$ ) & \begin{array} { l } \text { Total } \\\text { Revenue }\end{array} & \begin{array} { l } \text { Marginal } \\\text { Revenue }\end{array} \\\hline 1 & 50 & 50 & - \\\hline 2 & 45 & 90 & 40 \\\hline 3 & 40 & & 30 \\\hline 4 & & 140 & 20 \\\hline 5 & 30 & 150 & \\\hline\end{array}$$

-Refer to Table 9.1,which shows revenue for a monopolist.Total revenue from selling 3 units is _____

A)$10.
B)$120.
C)$90.
D)$35.
E)$50.

Question 32

Table 9.1
$$\begin{array} { | c | c | c | c | } \hline \text { Quantity } & \text { Price } ( \$ ) & \begin{array} { l } \text { Total } \\\text { Revenue }\end{array} & \begin{array} { l } \text { Marginal } \\\text { Revenue }\end{array} \\\hline 1 & 50 & 50 & - \\\hline 2 & 45 & 90 & 40 \\\hline 3 & 40 & & 30 \\\hline 4 & & 140 & 20 \\\hline 5 & 30 & 150 & \\\hline\end{array}$$

-Refer to Table 9.1,which shows revenue for a monopolist.Average revenue for 4 units is _____

A)$10.
B)$120.
C)$90.
D)$35.
E)$50.

Question 33

A monopolist can either sell 100 units for $3 each or sell 160 units for $2 each.This implies that,for the given range of output,elasticity of demand for the monopolist's product is _____

A)greater than one but not infinite.
B)one.
C)zero.
D)less than zero.
E)infinite.

Question 34

For a monopolist,average revenue is _____

A)equal to marginal revenue at all output levels.
B)greater than price at all output levels.
C)less than price at all output levels.
D)represented by a horizontal curve at all output levels.
E)more than marginal revenue at all output levels.

Question 35

Table 9.4
?
$\begin{array}{lc}\text { Price }(\$) & \text { Quantity } \\\hline 90 & 1 \\80 & 2 \\70 & 3 \\60 & 4 \\50 & 5\end{array}$

-Refer to Table 9.4,which shows the demand schedule for a monopolist.Marginal revenue associated with the sale of the fourth unit of output is _____

A)$10.
B)$30.
C)$60.
D)$240.
E)$210.

Question 36

China is a monopoly supplier of pandas to the world's zoos and rents out a pair of pandas for $1 million a year.If China can supply 5 pairs of pandas to 5 zoos worldwide each year,its total revenue is _____

A)$1 million.
B)$2 million.
C)$5 million.
D)$25 million.
E)$50 million.

Question 37

Suppose a monopolist must choose between two points on its demand curve.It can either sell 100 units for $3 each or sell 140 units for $2 each.Which of the following is true?

A)The demand for the monopolist's product is price elastic for the given range of output.
B)The demand for the monopolist's product is unit elastic for the given range of output.
C)The demand for the monopolist's product is price inelastic for the given range of output.
D)The monopolist is facing a horizontal supply curve.
E)The monopolist is facing an upward-rising demand curve.

Question 38

China is a monopoly supplier of pandas to the world's zoos and rents out a pair of pandas for $1 million a year.If China can supply 5 pairs of pandas to 5 zoos worldwide each year,its average revenue is _____

A)$1 million.
B)$2 million.
C)$5 million.
D)$25 million.
E)$50 million.

Question 39

Table 9.1
$$\begin{array} { | c | c | c | c | } \hline \text { Quantity } & \text { Price } ( \$ ) & \begin{array} { l } \text { Total } \\\text { Revenue }\end{array} & \begin{array} { l } \text { Marginal } \\\text { Revenue }\end{array} \\\hline 1 & 50 & 50 & - \\\hline 2 & 45 & 90 & 40 \\\hline 3 & 40 & & 30 \\\hline 4 & & 140 & 20 \\\hline 5 & 30 & 150 & \\\hline\end{array}$$

-Refer to Table 9.1,which shows for a monopolist.Marginal revenue from selling the 5th unit is _____

A)$10.
B)$120.
C)$90.
D)$35.
E)$50.

Question 40

As a monopolist increases the quantity of output produced,_____

A)both price and marginal revenue remain constant.
B)price remains constant, but marginal revenue decreases.
C)price decreases, but marginal revenue remains constant.
D)both price and marginal revenue decrease, but price falls faster than marginal revenue.
E)both price and marginal revenue decrease, but marginal revenue falls faster than price.

Question 41

Exhibit 9.2

Refer to Exhibit 9.2,which shows the cost and revenue curves faced by a monopolist.The demand curve faced by the monopolist at the profit-maximizing output is _____

A)perfectly price elastic.
B)price elastic.
C)price inelastic.
D)unit price elastic.
E)perfectly price inelastic.

Question 42

Which of the following equations describes the relationship between market price (P),average revenue (AR),and marginal revenue (MR)for a non-discriminating monopolist?

A)P = AR = MR
B)P > AR = MR
C)P = AR > MR
D)P > AR > MR
E)P = AR < MR

Question 43

Table 9.5
$$\begin{array} { c c c } \text { Quantity } & \text { Price } ( \$ ) & \text { Total Cost (\$) } \\0 & 10 & 10 \\1 & 9 & 12 \\2 & 8 & 19 \\3 & 7 & 23 \\4 & 6 & 31 \\5 & 5 & 46 \\6 & 4 & 69 \\7 & 3 & 99\end{array}$$

-Refer to Table 9.5.The loss-minimizing output for a non-discriminating monopolist is _____

A)0 units.
B)2 units.
C)3 units.
D)4 units.
E)5 units.

Question 44

Suppose a single firm supplies all the ceramic windlasses in the United States.The demand curve that the firm faces is _____

A)elastic everywhere.
B)unit elastic everywhere.
C)inelastic only at the profit-maximizing output.
D)perfectly inelastic everywhere.
E)elastic only at the profit-maximizing output.

Question 45

Exhibit 9.2

Refer to Exhibit 9.2,which shows the cost and revenue curves faced by a monopolist.At the profit-maximizing output level for the monopolist,_____

A)marginal revenue is zero.
B)marginal revenue is equal to marginal cost.
C)marginal cost is less than marginal revenue.
D)marginal cost is equal to average total cost.
E)price is equal to marginal cost.

Question 46

A non-price discriminating monopolist's demand curve _____

A)is horizontal at the market price.
B)lies to the right of its marginal revenue curve.
C)is the same as its marginal cost curve.
D)indicates that the firm must raise its price to sell additional units.
E)lies below the marginal cost curve at all levels of output.

Question 47

A monopolist must choose between two points on its demand curve.It can either sell 100 units for $3 each,or sell 150 units for $2 each.This implies that,for the given range of output,elasticity of demand for the monopolist's product is _____

A)zero.
B)one.
C)more than one but less than two.
D)infinite.
E)between zero and one.

Question 48

Suppose the marginal revenue for a particular level of a monopolist's output is $40.This implies that _____

A)total revenue is increasing for this output range.
B)total revenue is decreasing, but positive, for this output range.
C)total revenue is zero for this output range.
D)total revenue remains constant for this output range.
E)total revenue is negative for this output range.

Question 49

A profit-maximizing monopolist never produces along the _____

A)elastic portion of the demand curve, because marginal revenue is positive there.
B)elastic portion of the demand curve, because marginal revenue is negative there.
C)inelastic portion of the demand curve, because marginal revenue is negative there.
D)inelastic portion of the demand curve, because marginal revenue is positive there.
E)inelastic portion of the demand curve, because marginal revenue is zero there.

Question 50

Exhibit 9.2

Refer to Exhibit 9.2,which shows the cost and revenue curves faced by a monopolist.The profit-maximizing output and price for the monopolist are _____

A)117 units and $14, respectively.
B)150 units and $22, respectively.
C)150 units and $14, respectively.
D)117 units and $22, respectively.
E)117 units and $24, respectively.

Question 51

A firm facing a downward-sloping demand curve sells 50 units of output at $10 each.Which of the following can be concluded about the firm's marginal revenue for this output level?

A)Marginal revenue is equal to $500.
B)Marginal revenue is more than $10.
C)Marginal revenue is equal to $10.
D)Marginal revenue is less than $10 but more than zero.
E)Marginal revenue is zero.

Question 52

Table 9.5
$$\begin{array} { c c c } \text { Quantity } & \text { Price } ( \$ ) & \text { Total Cost (\$) } \\0 & 10 & 10 \\1 & 9 & 12 \\2 & 8 & 19 \\3 & 7 & 23 \\4 & 6 & 31 \\5 & 5 & 46 \\6 & 4 & 69 \\7 & 3 & 99\end{array}$$

-Refer to Table 9.5.The revenue-maximizing output for a non-discriminating monopolist is _____

A)0 units.
B)2 units.
C)3 units.
D)4 units.
E)5 units.

Question 53

Exhibit 9.2

Refer to Exhibit 9.2,which shows the revenue of a non-discriminating monopolist.The total revenue earned by the monopolist at the profit-maximizing output is _____

A)$2,574.
B)$2,808.
C)$2,100.
D)$1,638.
E)$3,300.

Question 54

Exhibit 9.2

Refer to Exhibit 9.2.A non-discriminating,profit-maximizing monopolist will earn a profit of _____ per unit of output.

A)$10
B)$5
C)$4
D)$0
E)$15

Question 55

For a monopolist producing a level of output at which market demand is inelastic,_____

A)short-run profit is maximum.
B)a decrease in price increases total revenue.
C)a decrease in price decreases total cost.
D)a decrease in price decreases total revenue.
E)an increase in output increases short-run economic profit.

Question 56

Which of the following is true for a monopolist?

A)Marginal revenue is maximized where demand is unit elastic.
B)Total revenue is maximized where demand is inelastic.
C)Marginal revenue is negative where demand is inelastic.
D)Total revenue is negative where demand is elastic.
E)Marginal revenue is lowest where demand is unit elastic.

Question 57

Which of the following can be concluded about a monopolist whose marginal revenue is zero for a particular output level?

A)The economic profit earned by the monopolist by producing that output level is zero.
B)Total revenue earned by the monopolist is at its maximum at that output level.
C)Total revenue earned by the monopolist increases at an increasing rate as output increases beyond that output level.
D)Total revenue earned by the monopolist increases at a decreasing rate as output increases beyond that output level.
E)Average revenue earned by the firm for that output level is less than marginal revenue for that output level.

Question 58

A profit-maximizing monopolist supplies the quantity at which _____

A)average revenue exceeds average cost by the greatest amount.
B)marginal revenue exceeds marginal cost by the smallest amount.
C)marginal revenue exceeds marginal cost by the greatest amount.
D)total revenue exceeds total cost by the greatest amount.
E)total revenue exceeds total cost by the smallest amount.

Question 59

Exhibit 9.2

Refer to Exhibit 9.2,which shows the cost and revenue curves for a non-discriminating monopolist.The total cost incurred by the monopolist at the profit-maximizing output is _____

A)$3,300.
B)$3,400.
C)$2,808.
D)$2,340.
E)$1,638.

Question 60

A firm facing a downward-sloping demand curve sells 50 units of output at $10 each.The firm's average revenue is _____

A)$500.
B)more than $10 but less than $500.
C)$10.
D)less than $10 but more than zero.
E)zero.

Question 61

Which of the following is true of a monopoly in the short run?

A)It can charge whatever price it wants.
B)It charges more than consumers are willing to pay.
C)It is constrained by marginal cost in setting price.
D)It is constrained by consumer demand in setting price.
E)It always earns an economic profit.

Question 62

Exhibit 9.4
Refer to Exhibit 9.4,which shows the total cost and total revenue curves for a monopolist.The profit-maximizing price charged by the monopolist is _____

A)$70.00.
B)$80.00.
C)$23.33.
D)$20.00.
E)$40.00.

Question 63

A non-discriminating monopolist observes that marginal revenue is $23 and marginal cost is $30 at its present output level.In order to maximize profit,it should _____

A)raise price and lower output.
B)lower both price and output.
C)raise both price and output.
D)lower price and raise output.
E)lower output but leave price unchanged.

Question 64

Irving R.Associates is granted a patent for a new product for which there are no close substitutes.Which of the following conditions must be true at the profit-maximizing output produced by this firm?

A)Price is equal to marginal cost.
B)Average cost is less than marginal cost.
C)Marginal revenue is equal to marginal cost.
D)Marginal revenue is less than average variable cost.
E)Price is greater than average revenue.

Question 65

A monopolist is said to have market power because _____

A)it faces an upward-sloping marginal cost curve.
B)it faces a downward-sloping demand curve.
C)it always earns positive profit both in the short run and the long run.
D)it charges a fixed price for its products.
E)it faces a high marginal cost of production.

Question 66

Exhibit 9.4
Refer to Exhibit 9.4,which shows the total cost and total revenue curves for a monopolist.The total profit earned by the monopolist at the profit-maximizing output is _____

A)$20.
B)$30.
C)$0.
D)$70.
E)$40.

Question 67

Exhibit 9.4
Refer to Exhibit 9.4,which shows the total cost and total revenue curves for a monopolist.The profit-maximizing output for the monopolist is _____

A)1 unit.
B)2 units.
C)3 units.
D)4 units.
E)5 units.

Question 68

Table 9.7
$$\begin{array} { | c | c | c | } \hline \text { Quantity } & \text { Price } ( \$ ) & \text { Total Cost } ( \$ ) \\\hline 1 & 36 & 20 \\\hline 2 & 32 & 32 \\\hline 3 & 28 & 50 \\\hline 4 & 24 & 80 \\\hline 5 & 20 & 120 \\\hline\end{array}$$

-Refer to Table 9.7,which shows the price and output combinations at different output levels for a non-price discriminating monopolist.The profit-maximizing price charged by this monopolist is _____

A)$36.
B)$32.
C)$28.
D)$24.
E)$20.

Question 69

Exhibit 9.3

Refer to Exhibit 9.3,which shows the cost and revenue curves for a non-discriminating monopolist.The total revenue earned by the profit-maximizing monopolist at the profit-maximizing output is _____

A)$16,200.
B)$36,000.
C)$39,600.
D)$30,800.
E)$31,000.

Question 70

Exhibit 9.3

Refer to Exhibit 9.3,which shows the cost and revenue curves for a non-discriminating monopolist.The total cost incurred by the monopolist for producing the profit-maximizing output is _____

A)$16,500.
B)$24,200.
C)$16,200.
D)$19,800.
E)$30,800.

Question 71

Exhibit 9.3

Refer to Exhibit 9.3,which shows the cost and revenue curves for a non-discriminating monopolist.The profit-maximizing output and price for the monopolist are _____

A)90 units and $18, respectively.
B)1,500 units and $24, respectively.
C)1,700 units and $22, respectively.
D)1,100 units and $28, respectively.
E)1,500 units and $22, respectively.

Question 72

Table 9.7
$$\begin{array} { | c | c | c | } \hline \text { Quantity } & \text { Price } ( \$ ) & \text { Total Cost } ( \$ ) \\\hline 1 & 36 & 20 \\\hline 2 & 32 & 32 \\\hline 3 & 28 & 50 \\\hline 4 & 24 & 80 \\\hline 5 & 20 & 120 \\\hline\end{array}$$

-Refer to Table 9.7,which shows the price and output combinations at different output levels for a non-price discriminating monopolist.The profit-maximizing output for this monopolist is _____

A)1 unit.
B)2 units.
C)3 units.
D)4 units.
E)5 units.

Question 73

Which of the following does a monopoly control that a perfectly competitive firm does not control?

A)total production
B)production technology
C)price
D)input usage
E)plant size

Question 74

Which of the following conditions is true at the profit-maximizing output for both a perfectly competitive firm and a monopoly?

A)Price equals marginal cost.
B)Price is greater than marginal cost.
C)Marginal revenue equals marginal cost.
D)Marginal revenue is less than marginal cost.
E)Marginal revenue is greater than average revenue.

Question 75

Table 9.6
$$\begin{array} { | c | c | c | } \hline \text { Price } ( \$ ) & \text { Quantity } & \text { Total Cost (\$) } \\\hline 16.00 & 0 & 5.00 \\\hline 15.00 & 1 & 7.00 \\\hline 14.00 & 2 & 8.80 \\\hline 13.00 & 3 & 10.40 \\\hline 12.00 & 4 & 12.20 \\\hline 11.00 & 5 & 14.20 \\\hline 10.00 & 6 & 16.40 \\\hline 9.00 & 7 & 18.80 \\\hline 8 & 8 & 21.40 \\\hline 7 & 9 & 24.20 \\\hline\end{array}$$

-Refer to Table 9.6,which shows the demand schedule faced by a monopolist and the total cost incurred by it in producing each output level.The maximum profit earned by the monopolist is _____

A)$5.00.
B)$40.80.
C)$43.60.
D)$44.20.
E)$42.60.

Question 76

For a monopolist that does not price discriminate,economic profit is maximized in the short run at a price of $140.Marginal revenue at that output level is _____

A)equal to $140.
B)greater than $140.
C)less than $140.
D)less than marginal cost.
E)greater than average revenue.

Question 77

Exhibit 9.3

Refer to Exhibit 9.3,which shows the cost and revenue curves for a non-price discriminating monopolist.At the profit-maximizing output,the non-price discriminating monopolist is earning a profit of _____

A)$6,200.
B)$13,320.
C)$11,000.
D)$15,200.
E)$0.

Question 78

Table 9.6
$$\begin{array} { | c | c | c | } \hline \text { Price } ( \$ ) & \text { Quantity } & \text { Total Cost (\$) } \\\hline 16.00 & 0 & 5.00 \\\hline 15.00 & 1 & 7.00 \\\hline 14.00 & 2 & 8.80 \\\hline 13.00 & 3 & 10.40 \\\hline 12.00 & 4 & 12.20 \\\hline 11.00 & 5 & 14.20 \\\hline 10.00 & 6 & 16.40 \\\hline 9.00 & 7 & 18.80 \\\hline 8 & 8 & 21.40 \\\hline 7 & 9 & 24.20 \\\hline\end{array}$$

-Refer to Table 9.6,which shows the demand schedule faced by a monopolist and the total cost incurred by it in producing each output level.The profit-maximizing price for the monopolist is _____.

A)$14.00.
B)$11.00.
C)$10.00.
D)$9.00.
E)$8.00.

Question 79

The profit-maximizing quantity for a monopolist that faces an upward-sloping marginal cost curve will _____

A)occur at the minimum point of the marginal cost curve.
B)be less than the revenue-maximizing quantity.
C)be equal to the revenue-maximizing quantity.
D)occur along the unit elastic segment of the demand curve.
E)occur along the inelastic segment of the demand curve.

Question 80

Table 9.7
$$\begin{array} { | c | c | c | } \hline \text { Quantity } & \text { Price } ( \$ ) & \text { Total Cost } ( \$ ) \\\hline 1 & 36 & 20 \\\hline 2 & 32 & 32 \\\hline 3 & 28 & 50 \\\hline 4 & 24 & 80 \\\hline 5 & 20 & 120 \\\hline\end{array}$$

-Refer to Table 9.7,which shows the price and output combinations at different output levels for a non-price discriminating monopolist.The total profit earned by this monopolist at the profit-maximizing output is _____

A)$16.
B)?$20.
C)$32.
D)$34.
E)-$16.