Question 1

Suppose that a pure monopolist can sell 15 units of output at $6 per unit and 16 units at $5.70 per unit. For the monopolist to profitably produce and sell the sixteenth unit of output, its marginal cost must be anywhere at or below
A)$6.
B)$5.70.
C)$1.80.
D)$1.20.

Accepted Answer

The marginal revenue for the sixteenth unit is calculated as the change in total revenue from selling one more unit: (16 units * $5.70) - (15 units * $6) = $91.20 - $90 = $1.20. For the monopolist to profitably produce the sixteenth unit, the marginal cost must be at or below the marginal revenue of $1.20.

Question 2

At its profit-maximizing output, the nondiscriminating pure monopolist whose information is in the accompanying table
A)incurs a loss.
B)earns an economic profit of $250.
C)earns a normal profit of $250.
D)earns an economic profit of $150.

Accepted Answer

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Question 3

Suppose that a pure monopolist can sell 9 units of output at $12 per unit and 10 units at $11.50 per unit. For the monopolist to profitably produce and sell the tenth unit of output, its marginal cost must be anywhere at or below
A)$12.
B)$11.50.
C)$9.00.
D)$7.00.

Accepted Answer

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Question 4

Refer to the demand and cost data for a pure monopolist given in the table. An unregulated, nondiscriminating monopolist would earn maximum profits of
A)$420.
B)$70.
C)$190.
D)$360.

Accepted Answer

The answer of  Refer to the demand and cost...

Question 5

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how much profit will the firm earn?
A)$1,100
B)$550
C)$620
D)$400

Accepted Answer

The answer of  If the profit-maximizing pure monopolist whose...

Question 6

Suppose that a monopolist calculates that at its present output level, marginal cost is $2.00 and marginal revenue is $3.00. The firm could increase profits by
A)increasing price and decreasing output.
B)decreasing price and increasing output.
C)decreasing price and leaving output unchanged.
D)decreasing output and leaving price unchanged.

Accepted Answer

To increase profits, a monopolist should produce more when marginal revenue exceeds marginal cost, as this indicates additional units produced add more to revenue than to costs.

Question 7

Suppose that a monopolist calculates that at its present output level, marginal revenue is $4.50 and marginal cost is $2.75. It could maximize profits or minimize losses by
A)increasing price and decreasing output.
B)decreasing price and increasing output.
C)decreasing price and leaving output unchanged.
D)decreasing output and leaving price unchanged.

Accepted Answer

To maximize profits or minimize losses, a monopolist should produce until marginal revenue equals marginal cost. Since the marginal revenue ($4.50) is greater than the marginal cost ($2.75), the firm can increase profits by increasing output, which typically involves decreasing price to sell the additional output.

Question 8

A pure monopolist is producing an output such that ATC = $9, P = $11, MC = $5, MR = $6, and AVC = $4.50. This firm is realizing
A)an economic loss that could be reduced by producing more output.
B)an economic loss that could be reduced by producing less output.
C)an economic profit that could be increased by producing more output.
D)an economic profit that could be increased by producing less output.

Accepted Answer

Since P > ATC, the firm is making an economic profit. To increase profit, it should produce more until MR = MC.

Question 9

Answer the question on the basis of the demand and cost data for a pure monopolist. At the profit-maximizing price and quantity of output, the monopolist will realize profit of
A)$11.25.
B)$10.00.
C)$6.50.
D)$4.50.

Accepted Answer

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Question 10

A pure monopolist is producing an output such that ATC = $4, P = $5, MC = $2, MR = $3, and AVC = $2.50. This firm is realizing
A)an economic loss that could be reduced by producing more output.
B)an economic loss that could be reduced by producing less output.
C)an economic profit that could be increased by producing more output.
D)an economic profit that could be increased by producing less output.

Accepted Answer

Since P > ATC, the firm is making an economic profit. To increase profit, it should produce more until MR = MC.

Question 11

Answer the question on the basis of the demand and cost data for a pure monopolist. The profit-maximizing price for the monopolist will be
A)$3.50.
B)$3.75.
C)$3.25.
D)$4.00.

Accepted Answer

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Question 12

Answer the question on the basis of the provided demand and cost data for a pure monopolist.  The profit-maximizing monopolist will realize a
A)profit of $8.50.
B)profit of $7.50.
C)profit of $16.
D)loss of $14.

Accepted Answer

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Question 13

Based on the accompanying table, how many units would the given profit-maximizing nondiscriminating pure monopolist produce?
A)4
B)3
C)2
D)1

Accepted Answer

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Question 14

Answer the question on the basis of the provided demand and cost data for a pure monopolist.  The profit-maximizing level of output will be
A)4 units.
B)7 units.
C)6 units.
D)5 units.

Accepted Answer

The answer of Answer the question on the basis of...

Question 15

Answer the question on the basis of the demand and cost data for a pure monopolist. The profit-maximizing quantity of output for the monopolist will be
A)5.
B)4.
C)6.
D)3.

Accepted Answer

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Question 16

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how many units will the firm produce?
A)5
B)4
C)3
D)2

Accepted Answer

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Question 17

Refer to the demand and cost data for a pure monopolist given in the table. An unregulated, nondiscriminating monopolist would maximize profits at a price and quantity of
A)$175 and 5 units.
B)$225 and 3 units.
C)$200 and 4 units.
D)$250 and 2 units.

Accepted Answer

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Question 18

Based on the accompanying table, this nondiscriminating pure monopolist should set its price at
A)$150.
B)$100.
C)$200.
D)$50.

Accepted Answer

The answer of  Based on the accompanying table, this...

Question 19

The data relate to a pure monopolist and the product it produces. What is the profit-maximizing output and price for this monopolist? 
A)P = $48; Q = 6
B)P = $56; Q = 5
C)P = $64; Q = 4
D)P = $72; Q = 3

Accepted Answer

The answer of The data relate to a pure monopolist...

Question 20

Answer the question on the basis of the provided demand and cost data for a pure monopolist.  The profit-maximizing price for the monopolist will be
A)$4.60.
B)$4.40.
C)$4.20.
D)$4.00.

Accepted Answer

The answer of Answer the question on the basis of...

Quiz 12: Pure Monopoly

Suppose that a pure monopolist can sell 15 units of output at $6 per unit and 16 units at $5.70 per unit. For the monopolist to profitably produce and sell the sixteenth unit of output, its marginal cost must be anywhere at or below

At its profit-maximizing output, the nondiscriminating pure monopolist whose information is in the accompanying table

Suppose that a pure monopolist can sell 9 units of output at $12 per unit and 10 units at $11.50 per unit. For the monopolist to profitably produce and sell the tenth unit of output, its marginal cost must be anywhere at or below

Refer to the demand and cost data for a pure monopolist given in the table. An unregulated, nondiscriminating monopolist would earn maximum profits of

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how much profit will the firm earn?

Suppose that a monopolist calculates that at its present output level, marginal cost is $2.00 and marginal revenue is $3.00. The firm could increase profits by

Suppose that a monopolist calculates that at its present output level, marginal revenue is $4.50 and marginal cost is $2.75. It could maximize profits or minimize losses by

A pure monopolist is producing an output such that ATC = $9, P = $11, MC = $5, MR = $6, and AVC = $4.50. This firm is realizing

Answer the question on the basis of the demand and cost data for a pure monopolist. At the profit-maximizing price and quantity of output, the monopolist will realize profit of

A pure monopolist is producing an output such that ATC = $4, P = $5, MC = $2, MR = $3, and AVC = $2.50. This firm is realizing

Answer the question on the basis of the demand and cost data for a pure monopolist. The profit-maximizing price for the monopolist will be

Answer the question on the basis of the provided demand and cost data for a pure monopolist. The profit-maximizing monopolist will realize a

Based on the accompanying table, how many units would the given profit-maximizing nondiscriminating pure monopolist produce?

Answer the question on the basis of the provided demand and cost data for a pure monopolist. The profit-maximizing level of output will be

Answer the question on the basis of the demand and cost data for a pure monopolist. The profit-maximizing quantity of output for the monopolist will be

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how many units will the firm produce?

Refer to the demand and cost data for a pure monopolist given in the table. An unregulated, nondiscriminating monopolist would maximize profits at a price and quantity of

Based on the accompanying table, this nondiscriminating pure monopolist should set its price at

The data relate to a pure monopolist and the product it produces. What is the profit-maximizing output and price for this monopolist?

Answer the question on the basis of the provided demand and cost data for a pure monopolist. The profit-maximizing price for the monopolist will be