Multiple Choice

 Multiple Choice Essay

Part 15

Monopoly

1 . Monopolies use their very own market power to

a. charge prices that similar minimum common total expense. b. achieve normal income in the long run.

c. restrict outcome and increase price.

g. dump excessive supplies with their product on the market. ANSWER: crestrict output and increase value.

SECTION: 1OBJECTIVE: 1

2 . If govt officials break a natural monopoly up in several smaller sized firms, then the. competition will certainly force firms to attain financial profits instead of accounting profits. b. competition will power firms to produce surplus end result, which pushes up cost. c. the typical costs of production increases.

d. the standard costs of production is going to decrease.

SOLUTION: cthe normal costs of production raises.

SECTION: 1OBJECTIVE: 1

three or more. Sizable economical profits may persist over time under monopoly if the monopolist a. creates that output where normal total cost is at a maximum. n. is guarded by boundaries to admittance.

c. operates as a value taker rather than a price developer. d. realizes revenues that exceed changing costs.

ANSWER: bis protected by obstacles to entry.

SECTION: 1OBJECTIVE: 1

four. Most markets are not monopolies in the actual because a. firms usually confront downward-sloping require curves. m. supply figure slope upwards.

c. cost is usually arranged equal to minor cost by firms. m. there are fair substitutes for many goods.

RESPONSE: dthere are reasonable substitutes for most products.

SECTION: 1OBJECTIVE: 1

a few. Patents offer

a. permanent monopoly status to creators of scientific innovations. b. long term monopoly status to designers of any kind of intellectual property. c. momentary monopoly status to designers of clinical inventions. deb. temporary monopoly status to creators of any mental property. ANSWER: ctemporary monopoly status to creators of scientific inventions. SECTION: 1OBJECTIVE: 1

6th. If a monopolist can sell 7 units if the price is $3 and almost 8 units if the price is $2, then marginal revenue of selling the eighth product is corresponding to a. $2.

b. $3.

c. $16.

d. –$5.

ANSWER: d–$5

SECTION: 2OBJECTIVE: 2

George has the following demand competition for offering vegemite:

PriceQuantity

$5. 001

$4. 002

$3. 003

$2. 004

$1. 005

George provides marginal expense of $. 50 per unit.

7. Precisely what is George's profit-maximizing level of end result?

a. you

b. two

c. three or more

d. four

ANSWER: c3

SECTION: 2OBJECTIVE: 2

8. What is George's profit-maximizing value?

a. $4

b. $3

c. $2

d. $1

ANSWER: b$3

SECTION: 2OBJECTIVE: 2

on the lookout for. If a monopolist's marginal costs shift up by $1. 00, then a. the monopoly price will certainly rise by simply $1.

m. the monopoly price will certainly rise by simply more than $1.

c. the monopoly price will surge by below $1.

deb. there is no change in the monopoly price and profits land. ANSWER: cthe monopoly value will go up by below $1.

SECTION: 2OBJECTIVE: two

10. If a monopolist features zero minor costs it is going to produce

a. the output when total revenue is maximized.

m. in the range in which limited revenue remains to be increasing. c. at the level at which minor revenue is at a optimum. d. in the range in which marginal earnings is unfavorable. ANSWER: athe output from which total revenue is maximized.

SECTION: 2OBJECTIVE: 2

eleven. The supply shape for the monopolist

a. is lateral.

b. is usually vertical.

c. is a 45-degree line.

deb. does not are present.

ANSWER: ddoes not exist.

SECTION: 2OBJECTIVE: 2

Consider the following demand and expense information for any monopoly.

QuantityPriceTotal Cost

0$40$10

1$30$15

2$20$25

3$10$40

4$ 0$60

12. The minor revenue of the second unit is

a. $10

b....

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