Question 2(1 point)

If a monopolist sets her output such that marginal revenue, marginal cost and average total cost are equal, economic profit must be:

Question 2 options:

Zero

Negative

Positive

Indeterminate from the information given

Question 3(1 point)

3 A monopolist has equated marginal revenue to zero. The firm has:

Question 3 options:

maximized profit.

maximized revenue.

minimized cost.

minimized profit.

None of the above

Question 5(1 point)

For a monopolist, changes in demand will lead to changes in

Question 5 options:

price with no change in output.

output with no change in price.

both price and quantity.

any of the above can be true.

None of the above can be true

Question 6(1 point)

. The monopolist will always produce

Question 6 options:

in the inelastic portion of the demand curve.

at the unit elastic point on the demand curve.

at the point of perfect elasticity.

in the elastic portion of the demand curve.

Question 7(1 point)

. Assume that a profit maximizing monopolist is producing a quantity such that marginal revenue exceeds marginalcost. We can conclude that the

Question 7 options:

firm is maximizing profit.

firm's output is smaller than the profit maximizing quantity.

firm's output is larger than the profit maximizing quantity.

firm's output does not maximize profit, but we cannot conclude whether the output is too large or too small.

Question 8(1 point)

Scenario 3 The demand curve and marginal revenue curve for red herrings are given as follows: Q = 200 - 4P, MR = 50 - 0.5Q

Refer to Scenario 3. The marginal cost of red herrings is given as: MC = 0.5Q. The revenue maximizing output will be _____ and profit maximizing output will be _____.

Question 8 options:

50 and 25

100 and 50,

100 and 50,

200 and 100,

None of these .

Question 9(1 point)

EXHIBIT.At monopoly's profit maximizing output,MR = P + P(1/Ed), where MR is marginal revenue,P is Price and Edis price elasticity of demand.Use this information if/where needed.

A monopolist has set her level of output to maximize profit. The firm's marginal revenue is $20, and the price elasticity of demand is -2.0. The firm's profit maximizing price is approximately:

Question 9 options:

$20

$30

$40

$50

This problem cannot be answered without knowing the marginal cost.

Question 10(1 point)

. (Exercise 4, Chapter 10, Page 396) A firm faces the following average revenue (demand) curve:

P = 120 - 0.02Q, MR =120 -0.04Q

where Q is weekly production and P is price, measured in cents per unit an MR is the marginal revenue. The firm's cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits. The level of production, price, and total profit per week will be:

Question 10 options:

Q = 1000, P = $1.45, Profits = $250

Q = 1500, P = $0.90 , Profits = $200

Q = 1000, P = $0.90, Profits = $300

Q = 1500, P = $1.45, Profits = $300

Question 11(1 point)

The monopolist has no supply curve because

Question 11 options:

the quantity supplied at any particular price depends on the monopolist's demand curve.

the monopolist's marginal cost curve changes considerably over time.

. the relationship between price and quantity depends on both marginal cost and average cost.

there is a single seller in the market.

although there is only a single seller at the current price, it is impossible to know how many sellers would be in the market at higher prices.

Question 12(1 point)

Use the following information to answer the next question below.

The demand curve for green ink pads is: AR = 2500 - 2.5Q. The marginal cost of green ink pads is 5Q.

How many ink pads will be produced to maximize profit?

Question 12 options:

50

250

500

800

none of the above

Question 13(1 point)

A third-degree price discriminating monopolist can sell its output either in the local market or on an internetauction site (or both). Having sold all of its output it discovers that the marginal revenue in the local market is $20while its marginal revenue on the internet auction site is $30. To maximize profits the firm should

Question 13 options:

have sold more output in the local market and less at the internet auction site.

do nothing until it acquires more information on costs

. have sold less output in the local market and more on the internet auction site.

sell less in both markets until marginal revenue is zero.

sell more in both markets until marginal cost is zero.

Question 14(1 point)

A monopolist has determined that at the current level of output the price elasticity of demand is -0.15. Which of the following statements is true?

Question 14 options:

The firm should cut output.

This is typical for a monopolist; output should not be altered.

The firm should increase output.

None of the above is necessarily correct.

Question 15(1 point)

Exhibit.A profit maximizing firm faces this demand curve:P = 120 - 0.02 Q, where Q is weeklyproduction and P is price in cents per unit. The firm's cost function is given by:C = 60Q +25,000.

.Look at the exhibit above. What is the level of production Q, price P and total Profit per week:

Question 15 options:

Q = 1000 P = 80 cents Profits = 80,000 cents

Q = 1500 P = 80 cents Profits = 150,000 cents

Q = 1500 P = 90 cents Profits = 20,000 cents

Q = 1500 P = 90 cents Profits = 135,000 cents

Question 16(1 point)

Scenario 2:

A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product:

Q = 200 - 2P

MR = 100 - Q

TC = 5Q

MC = 5

Refer to Scenario 2. What level of output maximizes total revenue?

Question 16 options:

0

90

95

100

none of the above

Question 17(1 point)

Scenario 2:

A monopolist faces the following demand curve, marginal revenue curve, total cost curve and marginal cost curve for its product:

Q = 200 - 2P

MR = 100 - Q

TC = 5Q

MC = 5

. Refer to Scenario 2. What is the profit maximizing level of output?

Question 17 options:

0

90

95

100

none of the above

Question 18(1 point)

For a perfect first-degree price discriminator, incremental (marginal) revenue is:

Question 18 options:

greater than price if the demand curve is downward sloping.

the same as the marginal revenue curve if the firm is a non-discriminating monopolist.

equal to the price paid for each unit of output.

less than the marginal revenue for a non-discriminating monopolist.

Question 19(1 point)

. A lower east-side cinema charges $3.00 per ticket for children under 12 years of age and $5.00

per ticket for anyone 12 years of age or older. The firm has estimated that the price elasticity of

demand for tickets purchased by those 12 years of age or older is -1.5. Calculate the elasticity

of demand for tickets purchased for children under 12 years of age if prices are optimal (profit

maximizing) for this price discriminating monopolist.

Question 19 options:

-2.8

-2.25

-1.5

-2.0

None of the above

Question 20(1 point)

A monopolist faces two consumer groups: old and young. The demand of old clients for the output of the monopolist is Po = 100 - 2Qo. The demand of young clients is Py = 80 - Qy. The marginal cost of supplying any type of client is MC = 10. If the monopolist can price discriminate between the two groups (i.e., charge adifferent price to each group), what price will old and young clients be charged?

Question 20 options:

Po= $45;Py= $55

Po= $55;Py= $45

Po= $50;Py= $50

Po= $40;Py= $60

Question 21(1 point)

Exhibit 11-10.A monopolist faces the demand curve P = 20 - Q, where P is measured in dollars per unit and Q in thousands of units.MR curve is: MR= 20- 2Q.The monopolist has a constant average and marginal cost of $4 per unit

Refer to exhibit 11-10. The monopolist's profits and degree of monopoly power (Lerner's Index) are:

Question 21 options:

Profits = 64 Lerner's Index = .67

. Profits = 48 Lerner's Index = .67

Profits = 48 Lerner's Index = .57

. Profits = 91 Lerner's Index = 0.14

None of these

Question 25(1 point)

The deadweight loss under monopoly would be

Question 25 options:

each customer the maximum price that he or she is willing to pay

the reservation price to each customer

different groups of customers different prices for the same products.

different prices for different blocks of the same good or service.

Question 26(1 point)

Exhibit 11_5.A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and Midwest). Demand and marginal revenue for the two markets are:

P1 = 15 - Q1MR1 = 15 - 2Q1

P2 = 25 - 2Q2MR2 = 25 - 4Q2

The monopolist's total cost isC= 5 + 3(Q₁+Q₂). We are looking for the are price, output, profits, marginal revenues, and deadweight loss if the monopolist can price discriminate?

Look at exhibit 11.5 Quantities sold in markets 1 and 2 are: ___ and ____:

Question 26 options:

6 and 5

5.5 and 6

7.5 and 6

6 and 5.5

Question 27(1 point)

Exhibit 11_5.A monopolist is deciding how to allocate output between two geographically separated markets (East Coast and Midwest). Demand and marginal revenue for the two markets are:

P₁= 15 -Q₁MR₁= 15 - 2Q₁

P₂= 25 - 2Q₂MR₂= 25 - 4Q₂

The monopolist's total cost isC= 5 + 3(Q₁+Q₂). We are looking for the are price, output, profits, marginal revenues, and deadweight loss if the monopolist can price discriminate?

Look again at exhibit 11.5. Prices in markets 1 and 2 are: ___ and ____:

Question 27 options:

9 and 16

9 and 14

7.5 and 9

14 and 9

Question 28(1 point)

What happens to an incumbent (currently existing) firm's demand curve in monopolistic competition as new firms enter?

Question 28 options:

It shifts right and becomes less steep

It shifts down and becomes more horizontal

It becomes less horizontal

It shifts left and becomes more steep

. New entrants will not affect an incumbent firm's demand curve

Question 29(1 point)

Which of the following is true in long-run equilibrium for a firm in monopolistic competition?

Question 29 options:

The demand curve is tangent to marginal cost curve.

The demand curve is tangent to average cost curve.

The marginal cost curve is tangent to average cost curve

The demand curve is tangent to marginal revenue curve.

None of the above

Question 30(1 point)

Which of the following is true for both perfectly competitive and monopolistically competitive firms in the long run?

Question 30 options:

P = MC.

MC = ATC.

P = AC.

Profit equals zero.

Both c and d

Question 31(1 point)

Excess capacity in monopolistically competitive industries results because in equilibrium

Question 31 options:

each firm's output rate is too great to minimize average cost.

each firm's output rate is too small to minimize average cost.

firms make positive economic profit.

firms make positive economic profit.

Question 33(1 point)

If the monopolist facing the demand curve P = 20 -2Q is a perfectly discriminating monopolist and marginal cost is constant at $4, how much will the firm sell if it maximizes profits?

Question 33 options:

8

6

4

10

none of the above

Question 34(1 point)

Which of the following is true of the output level produced by a firm in long-run equilibrium in amonopolistically competitive industry?

Question 34 options:

It produces at minimum average cost.

It does not produce at minimum average cost, and average cost is increasing.

It does not produce at minimum average cost, and average cost is decreasing.

) Either B or C could be true.

Question 35(1 point)

A situation in which each firm is doing the best it can, given what its rivals are doing is called a:

Question 35 options:

Nash equilibrium

Cooperative equilibrium

Zero sum game

D) Stackelberg equilibrium