A Firm Will Earn Economic Profits Whenever

Question: http://ezto.mheducation.com/13252705293502695323.tp4?REQUEST=SHOWmedia&conId=13252705119505174&media=1image004.png

Refer to the above graph showing the revenue curves for a monopolist. If it wants to sell quantity Q1, it must charge a price:

Not labeled on the graph

Answer: B

Question: http://ezto.mheducation.com/13252705293502695323.tp4?REQUEST=SHOWmedia&conId=13252704059525275&media=image029.png

Refer to the above graph for a profit-maximizing monopolist. The firm will produce the quantity:

Answer: B

Question: The demand curve confronting a non-discriminating pure monopolist is:

The same as the industry’s demand curve

More elastic than the demand curve confronting a competitive firm

Derived by vertically summing the individual demand curves for the buyers

Horizontal

Answer: A

Question: An exclusive legal right as sole producer for 20 years granted to an inventor of a product is called a:

Franchise

License

Patent

Answer: D

Question:

Answer: B

Question: A non-discriminating pure monopolist is generally viewed as:

Both productively and allocatively efficient

Productively inefficient, but allocatively efficient

Both productively and allocatively inefficient

Productively efficient, but allocatively inefficient

Answer: C

Question: http://ezto.mheducation.com/13252705293502695323.tp4?REQUEST=SHOWmedia&conId=13252704366087427&media=image004.png

Refer to the above graph showing the revenue curves for a monopolist. The elastic portion of the demand curve ranges from quantity:

Q2 to Q4

Q3 to Q4

0 to Q3

0 to Q4

Answer: C

Question:

Answer: A

Question: One defining characteristic of pure monopoly is that:

The monopolist is a price taker

The monopolist uses advertising

There is relatively easy entry into the industry, but exit is difficult

The monopolist produces a product with no close substitutes

Answer: D

Question: Which is true of a price discriminating pure monopolist?

Profit will be higher than in the nondiscriminating case

Allocative inefficiency will be greater than in the nondiscriminating case

P > MR for the last unit sold

The average price will be higher than in the nondiscriminating case

Answer: D