What Do You Know About Monopoly? Quiz
Micro Economics CIA 3
- 1.Monopolists are price takers
- A.
True
- B.
False
- 2.A monopoly is the sole seller of a product with no close substitutes
- A.
True
- B.
False
- 3.The demand curve facing a monopolist is the market demand curve for its product
- A.
True
- B.
False
- 4.For the monopolist, marginal revenue is always less than the price of the good
- A.
True
- B.
False
- 5.Price discrimination is only possible if there is no arbitrage
- A.
True
- B.
False
- 6.Price discrimination can raise economic welfare because output increases beyond that which would result under monopoly pricing
- A.
True
- B.
False
- 7.Universities are engaging in price discrimination when they charge different levels of tuition to poor and wealthy students
- A.
True
- B.
False
- 8.Which of the following is not a barrier to entry in a monopolized market?
- A.
The government gives a single firm the exclusive right to produce some good
- B.
The cost of production make a single producer more efficient than a large number of producers
- C.
A key resource is owned by a single firm
- D.
A single firm is very large
- 9.A monopolist maximizes profit by producing the quantity at which
- A.
Marginal revenue equals marginal cost
- B.
Marginal revenue equals price
- C.
Marginal cost equals price
- D.
Marginal cost equals demand
- E.
None of the above occurs
- 10.The inefficiency associated with monopoly is due to
- A.
The monopoly's profits
- B.
The monopoly's losses
- C.
Overproduction of the good
- D.
Underproduction of the good
- 11.Compared to a perfectly competitive market, a monopoly market will usually generate
- A.
Higher prices and higher output
- B.
Higher prices and lower output
- C.
Lower prices and lower output
- D.
Lower prices and higher output
- 12.The monopolist's supply curve
- A.
Is the marginal-cost curve above average variable cost
- B.
Is the marginal-cost curve above average total cost
- C.
Is the upward-sloping portion of the average-total cost curve
- D.
Is the upward-sloping portion of the average variable cost
- E.
Does not exist
- 13.Which of the following statements about price discrimination is not true?
- A.
Price discrimination can raise economic welfare
- B.
Price discrimination requires that the seller be able to separate buyers according to their willingness to pay
- C.
Perfect price discrimination generates a deadweight loss
- D.
Price discrimination increases a monopolist's profits
- E.
For a monopolist to engage in price discrimination, buyers must be unable to engage in arbitrage
- 14.A monopoly is able to continue to generate economic profits in the long run because
- A.
Potential competitors sometimes don't notice the profits
- B.
There is some barrier to entry to that market
- C.
The monopolist is financially powerful
- D.
Antitrust laws eliminate competitors for a specified number of years
- E.
Of all of the above
- 15.The supply curve for a monopolist is always positively sloped
- A.
True
- B.
False
Questions: 10 | Attempts: 146349 | Last updated: Mar 22, 2022
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