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Exam 15: Monopoly

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Question 71

Multiple Choice

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Table 15-11 The following table shows quantity, price, and marginal cost information for a monopoly: -Refer to Table 15-11. What level of output should the firm produce to maximize its profit?

A) 2 units
B) 3 units
C) 4 units
D) 5 units

E) A) and D)
F) B) and C)

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Question 72

True/False

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Airlines often separate their customers into business travelers and personal travelers by giving a discount to those travelers who stay over a Saturday night.

A) True
B) False

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Question 73

Multiple Choice

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Table 15-21 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. -Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the total revenue when 7 ties are sold?

Figure 15-21 -Refer to Figure 15-21. What is the price and quantity for this natural monopolist under socially optimal pricing?

A monopolist's average revenue is always

Figure 15-9 -Refer to Figure 15-9. To maximize total surplus, a benevolent social planner would choose which of the following outcomes?

A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301 units of output for $44.60 per unit. The marginal revenue of the 301st unit of output is

Table 15-1 -Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it sell?

For a monopoly, marginal revenue is often greater than the price it charges for its good.

Table 15-21 Tommy's Tie Company, a monopolist, has the following cost and revenue information. Assume that Tommy's is able to engage in perfect price discrimination. -Refer to Table 15-21. If the monopolist can engage in perfect price discrimination, what is the quantity that maximizes economic profit?

Table 15-22 -Refer to Table 15-22. The average revenue of the 50th unit of output is

Scenario 15-9 Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppose the executives also know that 200 students are willing to pay $8 for admission on a weekday. The cost of operating the museum on a weekday is $2,000. -Refer to Scenario 15-9. How much profit will the museum earn if it charges all customers $12 for admission?

Table 15-8 The following table provides information on the price, quantity, and average total cost for a monopoly. -Refer to Table 15-8. What is the maximum profit that the monopolist can earn?

Table 15-7 Sally owns the only shoe store in town. She has the following cost and revenue information. -Refer to Table 15-7. What are Sally's fixed costs?

How does a competitive market compare to a monopoly that engages in perfect price discrimination?

What happens to the price and quantity sold of a drug when its patent runs out?

If the distribution of water is a natural monopoly, then

What is the deadweight loss due to profit-maximizing monopoly pricing under the following conditions: The price charged for goods produced is $10. The intersection of the marginal revenue and marginal cost curves occurs where output is 100 units and marginal revenue is $5. The socially efficient level of production is 110 units. The demand curve is linear and downward sloping, and the marginal cost curve is constant.

Table 15-22 -Refer to Table 15-22. The marginal revenue, when the quantity changes from 30 to 40 units, is

Figure 15-6 -Refer to Figure 15-6. What price will the monopolist charge?