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1 | |
At a monopolist's current output, ATC = $10, P = $11, MC = $8 and MR = $7. This firm is realizing: |
| | A) | an economic profit that could be increased by producing more output |
| | B) | an economic profit that could be increased by producing less output |
| | C) | an economic loss that could be increased by producing more output |
| | D) | an economic loss than could be increased by producing less output |
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2 | |
Use the following diagram to answer the next question.
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Refer to the diagram. At output q2: |
| | A) | marginal revenue exceeds marginal cost by the greatest amount |
| | B) | demand is inelastic |
| | C) | profit is maximized |
| | D) | marginal revenue is zero |
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3 | |
A pure monopolist is selling 8 units at a price of $50. If the marginal revenue of the ninth unit is $23, then: |
| | A) | the price of the ninth unit is $45 |
| | B) | the price of the ninth unit is $47 |
| | C) | the price of the ninth unit is $52 |
| | D) | the firm's demand curve is inelastic at a price of $50 |
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4 | |
In long run equilibrium, both a competitive firm and a monopolistic firm: |
| | A) | earn zero economic profits |
| | B) | set price equal to marginal revenue |
| | C) | produce at minimum average total cost |
| | D) | set marginal revenue equal to marginal cost |
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5 | |
Use the following diagram to answer the next question:
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Refer to the diagram. This nondiscriminating monopolist will produce: |
| | A) | M units at price A and make a profit |
| | B) | N units at price B and earn zero profits |
| | C) | M units at price C and incur a loss |
| | D) | Q units at price J and earn zero profits |
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6 | |
Use the following diagram to answer the next question:
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Refer to the diagram. If this firm produces its profit-maximizing output, its potential profit is: |
| | A) | zero |
| | B) | area AFHC |
| | C) | area AFGB |
| | D) | area BGHC |
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7 | |
A profit-maximizing, nondiscriminating monopolist will set its price: |
| | A) | equal to minimum average total cost |
| | B) | so as to maximize profit per unit |
| | C) | on the inelastic portion of its demand curve |
| | D) | so as to equate marginal revenue and marginal cost |
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8 | |
A profit-maximizing, nondiscriminating monopolist is currently charging a price of $79 for its output. Its marginal revenue: |
| | A) | is less than $79 |
| | B) | is more than $79 |
| | C) | is equal to $79 |
| | D) | any of the above are possible |
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9 | |
Use the following diagram to answer the next question.
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Refer to the diagram. If this profit-maximizing monopolist is currently producing output Q3 at average total cost equal to P3, then this firm: |
| | A) | could increase its profit by lowering its price |
| | B) | is being regulated |
| | C) | is engaging in price discrimination |
| | D) | is a natural monopoly |
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10 | |
Use the following diagram to answer the next question.
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Refer to the diagram. If this monopolist could engage in perfect price discrimination, it would produce: |
| | A) | Q3 units, selling the last one at price P3 |
| | B) | Q1 units, selling the last one at price P1 |
| | C) | Q2 units, selling the last one at price P3 |
| | D) | Q2 units, selling the last one at price P2 |
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