Deck 9: B--Monopoly

Question 1

Cell phone companies offer pricing plan alternatives in order to convert some

A)consumer surplus into profit
B)producer surplus into profit
C)economic profit into normal profit
D)profit into consumer surplus
E)consumer surplus into deadweight loss

Answer 1

consumer surplus into profit

Question 2

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The market price in a monopolist market would

A)$10
B)$15
C)$20
D)$25
E)$30

Answer 2

$30

Question 3

Adam Matsumi is an attorney who can charge legal fees above the competitive level because entry of new competitors is made more difficult by the need to hold a(n)

A)state license
B)patent
C)essential resource
D)economy of scale
E)copyright

Answer 3

state license

Question 4

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The consumer surplus in a monopolist market would be

A)$10
B)$20
C)$30
D)$40
E)$50

Question 5

Consumer concern about "blood diamonds" or "conflict diamonds" may have caused a drop in De Beers sales.

Question 6

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The output for a monopolist would be

A)2 bicycles
B)3 bicycles
C)4 bicycles
D)5 bicycles
E)6 bicycles

Question 7

Which of the following is not an example of De Beers trying to increase consumer demand?

A)sending the marketing message that a diamond last forever and so should love
B)ads that illustrate that a diamond should remain in the family and not be sold
C)informing potential customers about how diamonds lose monetary value over time
D)introducing the idea of the diamond engagement ring
E)the "spirit ring" as a sign of independence

Question 8

Because some monopolies could still earn an economic profit even if the firm is inefficient, corporate executives might waste resources by indulging in

A)long lunches
B)corporate jets
C)plush offices
D)None of the answers is correct.
E)All of the answers are correct.

Question 9

Exhibit 9-20 In Exhibit 9-20, a price discriminating monopolist will charge what price?

A)P₁ in segments A and B
B)P₂ in segments A and B
C)P₃ in segments A and B
D)P₁ in segment A and P2 in segment B
E)unable to be determined

Question 10

Exhibit 9-20 In Exhibit 9-20, how does market segment A differ from market segment B?

A)demand is relatively more elastic in segment A than in segment B
B)demand is relatively more income elastic in segment A than in segment B
C)demand is relatively more income elastic in segment B than in segment A
D)there are more consumers in segment A than in segment B
E)demand is relatively more inelastic in segment A than in segment B

Question 11

Exhibit 9-20 In Exhibit 9-20, a non-discriminating monopolist will charge what price?

A)P₁
B)P₂
C)P₃
D)either P₁ or P₂
E)unable to tell from the information given

Question 12

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The market price in a competitive market would be

A)$10
B)$15
C)$20
D)$25
E)$30

Question 13

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The consumer surplus in a competitive market would be

A)$10
B)$20
C)$30
D)$40
E)$50

Question 14

Which of the following is an example of a local monopoly?

A)a restaurant at a rural crossroads
B)Alcoa during the 19th century
C)De Beers Consolidated Mines
D)AT&T
E)U.S.Postal Service

Question 15

Which of the following is not an example of price discrimination?

A)IBM charges business users of its laser printer more than home users
B)Intel offered faster and slower versions of a computer chip
C)An amusement park charges the same admission fee to local residents and out-of-towners
D)Adobe stripped some features from Photoshop to offer a cheaper version
E)Holders of Nevada driver's licenses pay less to ride the Las Vegas monorail

Question 16

Business-class airline tickets cost much more than coach-class tickets because, compared to householders, businesspeople's demand for travel is

A)equally elastic
B)unitary elastic
C)more elastic
D)less elastic
E)not a factor in the cost of airline tickets

Question 17

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The output in a competitive industry would be

A)2 bicycles
B)3 bicycles
C)4 bicycles
D)5 bicycles
E)6 bicycles

Question 18

Exhibit 9-21 In Exhibit 9-21, D = AR represents the market demand curve for bicycles, MR_m represents the marginal revenue curve for a monopolist producer of bicycles and S_c = MC = AC represents the marginal cost curve for a monopolist producer of bicycles and the market supply curve when the market is perfectly competitive.The deadweight loss due to monopoly would be

A)$10
B)$20
C)$30
D)$40
E)$50