Question 1

Refer to the graph shown. If this monopolist sets the price to maximize profit, it will earn economic profit of:

Accepted Answer

The answer of Refer to the graph shown. If this...

Question 2

Refer to the graph shown. If this firm is maximizing profit, it will:

Accepted Answer

The answer of Refer to the graph shown. If this...

Question 3

A monopolist:

Accepted Answer

A monopolist can earn profits or incur losses in the short run, depending on the price and quantity sold. However, in the long run, entry of new firms can limit the monopolist's ability to charge high prices and earn economic profits.

Question 4

The DeBeers Company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will:

Accepted Answer

As a profit-maximizing monopolist, DeBeers will set the price of diamonds above both the marginal cost and the average total cost of diamonds in order to maximize their economic profits. If the price was set at either the marginal cost or the average total cost, the company would not be able to earn positive economic profits. Thus, the price of diamonds will exceed both the marginal cost and the average total cost of diamonds.

Question 5

Refer to the graph shown. If the price of the product is $1 and the firm is a natural monopoly:

Accepted Answer

The answer of Refer to the graph shown. If the...

Question 6

Refer to the graph shown. The profit-maximizing monopolist produces output:

Accepted Answer

The answer of Refer to the graph shown. The profit-maximizing...

Question 7

Refer to the graph shown. At an output of a, the monopolist should:

Accepted Answer

The answer of Refer to the graph shown. At an...

Question 8

Refer to the graph shown. Assuming that this monopolist maximizes profit, the marginal cost of its last unit of output will be:

Accepted Answer

The answer of Refer to the graph shown. Assuming that...

Question 9

Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the monopolist is currently producing 400 computers per year and it seeks to maximize profit, it should: $$\begin{array} { | r | r | } 
\hline   { \begin{array} { c } 
\text { Price df } \
\text { computers(\$) }
\end{array} } & \text { Quantity demanded per year } \
\hline 5,000 & 100 \
\hline 4,000 & 200 \
\hline 3,000 & 300 \
\hline 2,000 & 400 \
\hline 1,000 & 500 \
\hline
\end{array}$$

Accepted Answer

To maximize profit, a monopolist should produce at the quantity where marginal revenue equals marginal cost. Without specific cost data, we can infer from the demand schedule that reducing output from 400 units would allow the monopolist to increase the price, potentially increasing revenue and profit if the cost savings from producing fewer units outweigh the revenue lost from selling fewer units. Producing more would lower the price and potentially revenue, given the downward-sloping demand curve.

Question 10

Refer to the graph shown. If this monopolist sets the price to maximize profit, it will charge:

Accepted Answer

The answer of Refer to the graph shown. If this...

Question 11

Refer to the graph shown. The profit-maximizing monopolist would sell its output at price:

Accepted Answer

The answer of Refer to the graph shown. The profit-maximizing...

Question 12

Refer to the graph shown. If this monopolist charges a price of $8 for its product, it:

Accepted Answer

The answer of Refer to the graph shown. If this...

Question 13

Refer to the graph shown. Assuming that this monopolist maximizes profit, it will produce:

Accepted Answer

The answer of Refer to the graph shown. Assuming that...

Question 14

Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the firm were to set the price of computers at $2,000: $\begin{array}{|c|c|}
\hline \text { Price of computers }(\$)& \text { Quantity demanded per year }\
\hline 5,000 & 100 \
\hline 4,000 & 200 \
\hline 3,000 & 300 \
\hline 2,000 & 400 \
\hline 1,000 & 500 \
\hline
\end{array}$

Accepted Answer

The answer of Refer to the table shown, which shows...

Question 15

Refer to the graph shown. The profit-maximizing monopolist would be:

Accepted Answer

The answer of Refer to the graph shown. The profit-maximizing...

Question 16

Refer to the graph shown. If the monopolist produces at the output level at which price equals marginal cost, it will:

Accepted Answer

The answer of Refer to the graph shown. If the...

Question 17

Refer to the graph shown. In a perfectly competitive industry, price would:

Accepted Answer

The answer of Refer to the graph shown. In a...

Question 18

Refer to the graph shown. At the price of $1.60, given market demand for the product:

Accepted Answer

The answer of Refer to the graph shown. At the...

Question 19

Refer to the graph shown. If this monopolist produces 700 units of output per day, it:

Accepted Answer

The answer of Refer to the graph shown. If this...

Question 20

Refer to the table shown, which shows the demand schedule for a firm that has a monopoly on the sale of computers in the country of Oz. If the marginal cost of producing computers is $1,000 no matter how many are produced and the monopolist seeks to maximize profit, it should set the price of computers at: $$\begin{array} { | r | r | } 
\hline   { \begin{array} { c } 
\text { Price of } \
\text { computers(\$) }
\end{array} } & \text { Quantity demanded per year } \
\hline 5,000 & 100 \
\hline 4,000 & 200 \
\hline 3,000 & 300 \
\hline 2,000 & 400 \
\hline 1,000 & 500 \
\hline
\end{array}$$

Accepted Answer

To maximize profit, the monopolist should produce where marginal cost equals marginal revenue. At a price of $3,000, the marginal revenue equals the marginal cost of $1,000, maximizing profit.

Quiz 14: Monopoly and Monopolistic Competition

Refer to the graph shown. If this monopolist sets the price to maximize profit, it will earn economic profit of:

Refer to the graph shown. If this firm is maximizing profit, it will:

A monopolist:

The DeBeers Company is a profit-maximizing monopolist that exercises monopoly power in the distribution of diamonds. If the company earns positive economic profits this year, the price of diamonds will:

Refer to the graph shown. If the price of the product is $1 and the firm is a natural monopoly:

Refer to the graph shown. The profit-maximizing monopolist produces output:

Refer to the graph shown. At an output of a, the monopolist should:

Refer to the graph shown. Assuming that this monopolist maximizes profit, the marginal cost of its last unit of output will be:

Refer to the graph shown. If this monopolist sets the price to maximize profit, it will charge:

Refer to the graph shown. The profit-maximizing monopolist would sell its output at price:

Refer to the graph shown. If this monopolist charges a price of $8 for its product, it:

Refer to the graph shown. Assuming that this monopolist maximizes profit, it will produce:

Refer to the graph shown. The profit-maximizing monopolist would be:

Refer to the graph shown. If the monopolist produces at the output level at which price equals marginal cost, it will:

Refer to the graph shown. In a perfectly competitive industry, price would:

Refer to the graph shown. At the price of $1.60, given market demand for the product:

Refer to the graph shown. If this monopolist produces 700 units of output per day, it: