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3 Written questions

4 Matching questions

  1. The nondiscriminating pure monopolist's demand curve:
    A) is the industry demand curve.
    B) shows a direct or positive relationship between price and quantity demanded.
    C) tends to be inelastic at high prices and elastic at low prices.
    D) is identical to its marginal revenue curve.
  2. If a monopolist engages in perfect price discrimination, it will:
    A) realize a smaller profit.
    B) charge a higher price where individual demand is inelastic and a lower price where individual demand
    is elastic.
    C) produce a smaller output than when it did not discriminate.
    D) charge a competitive price to all its customers.
  3. A pure monopolist's demand curve is:
    A) downsloping. B) upsloping. C) parallel to the vertical axis. D) parallel to the horizontal axis.
  4. A pure monopolist is producing an output such that ATC = $4, P = $5, MC = $2, and MR = $3. This firm is
    realizing:
    A) a loss that could be reduced by producing more output.
    B) a 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.
  1. a d
  2. b b
  3. c a
  4. d c

5 Multiple choice questions

  1. d
  2. a
  3. c
  4. c
  5. b

5 True/False questions

  1. A nondiscriminating pure monopolist's demand curve:
    A) is perfectly inelastic. C) lies above its marginal revenue curve.
    B) coincides with its marginal revenue curve. D) lies below its marginal revenue curve.
    d

          

  2. Other things equal, in which of the following cases would economic profit be the greatest?
    A) an unregulated monopolist which is able to engage in price discrimination
    B) an unregulated monopolist
    C) a regulated monopolist charging a price equal to average total cost
    D) a regulated monopolist charging a price equal to marginal cost
    c

          

  3. The short-run profit maximizing position of an unregulated pure monopolist is characterized by:
    A) P = minimum ATC. B) P = MC. C) MR = MC. D) MC = ATC.
    c

          

  4. At its profit-maximizing output, a pure nondiscriminating monopolist achieves:
    A) neither productive efficiency nor allocative efficiency.
    B) both productive efficiency and allocative efficiency.
    C) productive efficiency but not allocative efficiency.
    D) allocative efficiency but not productive efficiency.
    a

          

  5. Which of the following is not a precondition for price discrimination?
    A) The commodity involved must be a durable good.
    B) The good or service cannot be resold by original buyers.
    C) The seller must be able to segment the market, that is, to distinguish buyers with different elasticities of
    demand.
    D) The seller must possess some degree of monopoly power.
    a