econ pure monopoly

Which of the following best approximates a pure monopoly? A. The foreign exchange market. B. The Kansas City wheat market. C. The only bank in a small town. D. The soft drink market.

Which of the following is a characteristic of pure monopoly? A. Close substitute products. B. Barriers to entry. C. The absence of market power. D. "Price taking."

Which of the following is not a barrier to entry? A. Patents. B. X-inefficiency. C. Economies of scale. D. Ownership of essential resources.

A natural monopoly occurs when: A. long-run average costs decline continuously through the range of demand. B. a firm owns or controls some resource essential to production. C. long-run average costs rise continuously as output is increased. D. economies of scale are obtained at relatively low levels of output.

If a nondiscriminating imperfectly competitive firm is selling its 100th unit of output for $35, its marginal revenue: A. may be either greater or less than $35. B. will also be $35. C. will be less than $35. D. will be greater than $35.

Refer to the diagram. If price is reduced from P1 to P2, total revenue will: A. increase by A - C. B. increase by C - A. C. decrease by A - C. D. decrease by C - A.

A monopolistic firm has a sales schedule such that it can sell 10 prefabricated garages per week at $10,000 each, but if it restricts its output to 9 per week it can sell these at $11,000 each. The marginal revenue of the tenth unit of sales per week is: A. -$1,000. B. $9,000. C. $10,000. D. $1,000.

The marginal revenue curve for a monopolist: A. is a straight, upsloping curve. B. rises at first, reaches a maximum, and then declines. C. becomes negative when output increases beyond some particular level. D. is a straight line, parallel to the horizontal axis.

Refer to the diagram. Demand is relatively elastic: A. in the P2P1 price range. B. in the 0P1 price range. C. in the P2P4 price range. D. only at price P2.

Which of the following is characteristic of a pure monopolist's demand curve? A. Average revenue is less than price. B. Its elasticity coefficient is 1 at all levels of output. C. Price and marginal revenue are equal at all levels of output. D. It is the same as the market demand curve.

Assuming no change in product demand, a pure monopolist: A. can increase price and increase sales simultaneously because it dominates the market. B. adds an amount to total revenue that is equal to the price of incremental sales. C. should produce in the range where marginal revenue is negative. D. must lower price to increase sales.

Which of the diagrams correctly portrays a nondiscriminating pure monopolist's demand (D) and marginal revenue (MR) curves? A. A. B. B. C. C. D. D.

An unregulated pure monopolist will maximize profits by producing that output at which: A. P = MC. B. P = ATC. C. MR = MC. D. MC = AC.

Refer to the data for a nondiscriminating monopolist. At its profit-maximizing output, this firm's total costs will be: A. $300. B. $248. C. $198. D. $126.

Refer to the diagram. At the profit-maximizing level of output, total revenue will be: A. NM times 0M. B. 0AJE. C. 0EGC. D. 0EHB.

If a pure monopolist is producing at that output where P = ATC, then: A. its economic profits will be zero. B. it will be realizing losses. C. it will be producing less than the profit-maximizing level of output. D. it will be realizing an economic profit.

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.

X-inefficiency refers to a situation in which a firm: A. is not as technologically progressive as it might be. B. encounters diseconomies of scale. C. fails to realize all existing economies of scale. D. fails to achieve the minimum average total costs attainable at each level of output.

In which one of the following market models is X-inefficiency most likely to be the greatest? A. Pure competition. B. Oligopoly. C. Monopolistic competition. D. Pure monopoly.

The practice of price discrimination is associated with pure monopoly because: A. it can be practiced whenever a firm's demand curve is downsloping. B. monopolists have considerable ability to control output and price. C. monopolists usually realize economies of scale. D. most monopolists sell differentiated products.

If a monopolist engages in 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.

Refer to the figure. Suppose the graphs represent the demand for use of a local golf course for which there is no significant competition (it has a local monopoly); P denotes the price of a round of golf; Q is the quantity of rounds "sold" each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, this profit-maximizing golf course should: A. charge $9 for each round, regardless of the day of the week. B. charge $7 for each round, regardless of the day of the week. C. charge $7 for each round on weekdays and $10 during the weekend. D. charge $9 for each round on weekdays and $10 during the weekend.

A dilemma of regulation is that: A. the regulated price that achieves allocative efficiency is also likely to result in persistent economic profits. B. the regulated price that results in a "fair return" restricts output by more than would unregulated monopoly. C. regulated pricing always conflicts with the "due process" provision of the Constitution. D. the regulated price that achieves allocative efficiency is also likely to result in losses.