Question 1

For a monopolist, which one of the following variables can take a negative value?

Accepted Answer

Marginal revenue can take a negative value for a monopolist when lowering the price to sell one more unit leads to a decrease in total revenue, indicating a highly elastic demand at that quantity.

Question 2

Which one of the following statements is NOT true for a monopolist?

Accepted Answer

For a monopolist, the marginal revenue is typically not equal to the price because as they sell more units, they must lower the price to sell additional units, which causes the marginal revenue to be less than the price. This is in contrast to perfect competition, where marginal revenue equals price.

Question 3

Which one of the following statements is NOT true for a monopolist?

Accepted Answer

In a monopoly, the price is always above the marginal revenue because the monopolist faces a downward-sloping demand curve. As they sell more units, they must lower the price to sell additional units, which means the additional revenue gained from selling one more unit (marginal revenue) is less than the price at which the unit is sold.

Question 4

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. What is the marginal revenue for the monopolist from increasing its sales from two gallons to three gallons?
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Figure: Demand for Gasoline

Accepted Answer

The answer of Use Figure: Demand for Gasoline. The figure...

Question 5

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. The total revenue to the monopolist from selling three gallons is:
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Figure: Demand for Gasoline

Accepted Answer

The answer of Use Figure: Demand for Gasoline. The figure...

Question 6

A monopolist maximizes profit at the point where the _____ of production is equal to:

Accepted Answer

A monopolist maximizes profit where marginal cost (MC) is equal to marginal revenue (MR), not where MC equals price or total revenue, nor where average total cost equals price. This is because the profit-maximizing quantity is found at the point where the cost of producing one more unit (MC) is exactly covered by the revenue gained from selling that additional unit (MR).

Question 7

Suppose that the profit-maximizing price for a monopolist is $10 and the profit-maximizing quantity is 50 units. Further, the average total cost of producing 50 units is $8. The total profit for the monopolist in this scenario is:

Accepted Answer

The answer of Suppose that the profit-maximizing price for a...

Question 8

Suppose that the total profit earned by a monopolist $100. It also is known that the monopolist sells 50 units of output at a price of $10 per unit. Given this information, we can conclude that the average total cost of producing 50 units is:

Accepted Answer

The total revenue is 50 units * $10 = $500. The total profit is $100, so total cost is $500 - $100 = $400. The average total cost is $400 / 50 units = $8.

Question 9

Suppose that a monopolist is operating at its profit-maximizing point where the profit per unit is $8. If the average total cost of production is $4, then what is the price charged by the monopolist?

Accepted Answer

The profit per unit is the difference between the price charged and the average total cost. Given a profit per unit of $8 and an average total cost of $4, the price charged by the monopolist must be $4 + $8 = $12.

Question 10

Suppose that a monopolist is operating at its profit-maximizing point. If the marginal cost of production at this point is $4, the average total cost is $6, and the profit per unit is $ 6, then the marginal revenue is _____, and the price charged by the monopolist is:

Accepted Answer

The monopolist maximizes profit where marginal cost (MC) equals marginal revenue (MR), so MR is $4. The profit per unit is price minus average total cost, so $6 = price - $6, thus the price is $12.

Question 11

Suppose that a monopolist is operating at its profit-maximizing point. If the marginal revenue at this point is $4, the price is $12, and the profit per unit is $6, then the marginal cost is _____, and the average total cost is:

Accepted Answer

The answer of Suppose that a monopolist is operating at...

Question 12

Suppose that a monopolist is operating at its profit-maximizing point by charging a price of $18 and selling 50 units of output. If the marginal revenue of the firm is $10 and the average total cost is $12, then the firm's marginal cost is _____, and the total profit is:

Accepted Answer

The marginal cost (MC) for a profit-maximizing monopolist is equal to its marginal revenue (MR), which is $10. The total profit is calculated as (Price - Average Total Cost) * Quantity = ($18 - $12) * 50 = $6 * 50 = $300.

Question 13

A monopolist's profit is maximized at the point where marginal cost is equal to:

Accepted Answer

A monopolist maximizes profit where marginal cost (MC) is equal to marginal revenue (MR), not where MC equals price, total revenue, or average revenue. This is because the monopolist's profit-maximizing output level is determined by the intersection of the MC and MR curves.

Question 14

Use Figure: Profit-Maximizing Quantity and Price. The figure depicts the demand curve, marginal revenue curve, and marginal cost curve that are facing a monopolist. The profit-maximizing price for the monopolist is _____, and the profit-maximizing quantity is _____ units.
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Figure: Profit-Maximizing Quantity and Price

Accepted Answer

The answer of Use Figure: Profit-Maximizing Quantity and Price. The...

Question 15

Use Figure: Profit-Maximizing Quantity and Price. The figure depicts the demand curve, marginal revenue curve, and marginal cost curve that are facing a monopolist. Assume that the monopolist is operating at its profit-maximizing point. If the total profit of the monopolist is $200, then the total cost of production is:
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Figure: Profit-Maximizing Quantity and Price

Accepted Answer

The answer of Use Figure: Profit-Maximizing Quantity and Price. The...

Question 16

Use Figure: Profit-Maximizing Quantity and Price. The figure depicts the demand curve, marginal revenue curve, and marginal cost curve that are facing a monopolist. Assume that the monopolist is operating at its profit-maximizing point. If the total profit of the monopolist is $200, then the average total cost of production is:
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Figure: Profit-Maximizing Quantity and Price

Accepted Answer

The answer of Use Figure: Profit-Maximizing Quantity and Price. The...

Question 17

Use Figure: Profit-Maximizing Quantity and Price. The figure depicts the demand curve, marginal revenue curve, and marginal cost curve that are facing a monopolist. Assume that the monopolist is operating at its profit-maximizing point. If the total profit of the monopolist is $200, then the profit per unit is:
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Figure: Profit-Maximizing Quantity and Price

Accepted Answer

The answer of Use Figure: Profit-Maximizing Quantity and Price. The...

Question 18

Suppose that a monopoly firm is operating at its profit-maximizing point. The profit-maximizing price is $12, and the profit-maximizing quantity is 100 units. If the total profit of the monopolist is $400, then the average total cost of production is _____, and the profit per unit is:

Accepted Answer

The total revenue of the monopolist is price times quantity, which is $12 * 100 = $1200. The total profit is given as $400, which means the total cost is $1200 - $400 = $800. The average total cost is the total cost divided by the quantity, which is $800 / 100 = $8. The profit per unit is the difference between the price and the average total cost, which is $12 - $8 = $4.

Question 19

Use Figure: Monopoly Profit Maximization. The figure shows the demand, marginal revenue curve, marginal cost curve, and average total cost curve that are faced by a monopolist. The profit-maximizing price for the monopolist is _____, and the profit-maximizing quantity is _____ units.
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Figure: Monopoly Profit Maximization

Accepted Answer

The answer of Use Figure: Monopoly Profit Maximization. The figure...

Question 20

Use Figure: Monopoly Profit Maximization. The figure shows the demand curve, marginal revenue curve, marginal cost curve, and average total cost curve that are faced by a monopolist. Suppose that the firm is operating at its profit-maximizing point. The total revenue of the firm is _____, and the total cost of the firm is:
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Figure: Monopoly Profit Maximization

Accepted Answer

The answer of Use Figure: Monopoly Profit Maximization. The figure...

Quiz 10: Market Power

For a monopolist, which one of the following variables can take a negative value?

Which one of the following statements is NOT true for a monopolist?

Which one of the following statements is NOT true for a monopolist?

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. What is the marginal revenue for the monopolist from increasing its sales from two gallons to three gallons? Figure: Demand for Gasoline

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. The total revenue to the monopolist from selling three gallons is: Figure: Demand for Gasoline

A monopolist maximizes profit at the point where the _____ of production is equal to:

Suppose that the profit-maximizing price for a monopolist is $10 and the profit-maximizing quantity is 50 units. Further, the average total cost of producing 50 units is $8. The total profit for the monopolist in this scenario is:

Suppose that the total profit earned by a monopolist $100. It also is known that the monopolist sells 50 units of output at a price of $10 per unit. Given this information, we can conclude that the average total cost of producing 50 units is:

Suppose that a monopolist is operating at its profit-maximizing point where the profit per unit is $8. If the average total cost of production is $4, then what is the price charged by the monopolist?

Suppose that a monopolist is operating at its profit-maximizing point. If the marginal cost of production at this point is $4, the average total cost is $6, and the profit per unit is $ 6, then the marginal revenue is _____, and the price charged by the monopolist is:

Suppose that a monopolist is operating at its profit-maximizing point. If the marginal revenue at this point is $4, the price is $12, and the profit per unit is $6, then the marginal cost is _____, and the average total cost is:

Suppose that a monopolist is operating at its profit-maximizing point by charging a price of $18 and selling 50 units of output. If the marginal revenue of the firm is $10 and the average total cost is $12, then the firm's marginal cost is _____, and the total profit is:

A monopolist's profit is maximized at the point where marginal cost is equal to:

Suppose that a monopoly firm is operating at its profit-maximizing point. The profit-maximizing price is $12, and the profit-maximizing quantity is 100 units. If the total profit of the monopolist is $400, then the average total cost of production is _____, and the profit per unit is:

Quiz 10: Market Power

For a monopolist, which one of the following variables can take a negative value?

Which one of the following statements is NOT true for a monopolist?

Which one of the following statements is NOT true for a monopolist?

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. What is the marginal revenue for the monopolist from increasing its sales from two gallons to three gallons? ​ Figure: Demand for Gasoline

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. The total revenue to the monopolist from selling three gallons is: ​ Figure: Demand for Gasoline

A monopolist maximizes profit at the point where the _____ of production is equal to:

Suppose that the profit-maximizing price for a monopolist is $10 and the profit-maximizing quantity is 50 units. Further, the average total cost of producing 50 units is $8. The total profit for the monopolist in this scenario is:

Suppose that the total profit earned by a monopolist $100. It also is known that the monopolist sells 50 units of output at a price of $10 per unit. Given this information, we can conclude that the average total cost of producing 50 units is:

Suppose that a monopolist is operating at its profit-maximizing point where the profit per unit is $8. If the average total cost of production is $4, then what is the price charged by the monopolist?

Suppose that a monopolist is operating at its profit-maximizing point. If the marginal cost of production at this point is $4, the average total cost is $6, and the profit per unit is $ 6, then the marginal revenue is _____, and the price charged by the monopolist is:

Suppose that a monopolist is operating at its profit-maximizing point. If the marginal revenue at this point is $4, the price is $12, and the profit per unit is $6, then the marginal cost is _____, and the average total cost is:

Suppose that a monopolist is operating at its profit-maximizing point by charging a price of $18 and selling 50 units of output. If the marginal revenue of the firm is $10 and the average total cost is $12, then the firm's marginal cost is _____, and the total profit is:

A monopolist's profit is maximized at the point where marginal cost is equal to:

Suppose that a monopoly firm is operating at its profit-maximizing point. The profit-maximizing price is $12, and the profit-maximizing quantity is 100 units. If the total profit of the monopolist is $400, then the average total cost of production is _____, and the profit per unit is:

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. What is the marginal revenue for the monopolist from increasing its sales from two gallons to three gallons? Figure: Demand for Gasoline

Use Figure: Demand for Gasoline. The figure shows the demand curve for gasoline in a small town that has only one provider, which therefore is a monopolist. The total revenue to the monopolist from selling three gallons is: Figure: Demand for Gasoline