Project #87880 - Economics

 

The largest cattle rancher in a given region will be unable to have a ________ when sufficient numbers of smaller cattle ranchers provide sources of competition.

 

monopoly

 

oligopoly

 

monopolistic competition

 

For a pure monopoly to exist there is/are:

 

limited sellers in a particular industry.

 

only one seller, therefore no industry.

 

a single seller in a particular industry.

 

a few sellers in a given industry.

 

If the North American newsprint paper market has barriers to entry, then

 

abnormally high profits will attract the entry of new firms.

 

entry will be blocked even if firms are earning high profits.

 

the entry of new firms will eventually cause price to decline.

 

surviving firms earn only a normal level of profit in the long run.

 

Suppose P0 is $10 and P1 is $11. Suppose a new firm with the same LRAC curve as the incumbent tries to break into the market by selling 4,000 units of output. Estimate from the graph below what the new firm’s average cost of producing output would be. https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/CNX_Econ_C09_001.png

 

$13.00

 

$18.00

 

$11.00

 

Refer to the figure below. The total variable cost of production is: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/monopoly-with-loss.png

 

$720

 

$420

 

$160

 

$320

 

Refer to the figure below. The total variable cost of production is: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/monopoly-with-profit.png

 

$240

 

$420

 

$360

 

$160

 

If a monopolist produces one more unit of output, but sells the increased output at a slightly lower price:

 

because of higher output the marginal revenue curve is above the demand curve.

 

all the previous units, which used to sell at a higher price, now sell for more.

 

marginal revenue is affected by adding one additional unit sold at the new price

 

The slope of the demand curve for a monopoly firm is:

 

vertical, parallel to the y-axis.

 

upward sloping.

 

horizontal, parallel to the x-axis.

 

downward sloping.

 

Refer to the figure below. Total revenue is: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/monopoly-with-loss.png

 

$480

 

$160

 

$560

 

$420

 

 

 

The total revenue curve for a monopolist will ________.

 

start high, decline, and then rise

 

start high, rise, and then decline.

 

start low, rise, and then decline

 

The table below shows a monopolist’s demand curve and cost information for the production of its good. What quantity will it produce?

 

Quantity

Price per Unit

Total Cost

1,000

$5.00

$1,000

1,100

$4.50

$1,100

1,300

$2.50

$1,150

1,400

$2.00

$1,200

 

1,300

 

1,000

 

1,400

 

1,100

 

The table below shows a monopolist's demand curve and the cost information for the production of its good. What will their maximum profit be?​

 

Quantity

Price per Unit

Total Cost

10

$100

$100

20

$80

$400

30

$60

$800

40

$40

$1,400

50

$20

$2,400

 

$1,000

 

$1,200

 

$1,600

 

Refer to the figure below. Total profit is: https://s3-us-west-2.amazonaws.com/oerfiles/Assessments/economics/monopoly-with-profit.png

 

$60

 

$-120

 

$80

 

$240

 

Refer to the table below. This information reflects the demand curve and the average cost curve for a firm that is a natural monopoly. What will this firm’s profits equal?

 

Price

Quantity Demanded

LRAC

$13

1

$10.50

$11

2

$9.75

$9

3

$9.50

$7

4

$9.625

$5

5

$10.30

 

$2.50

 

$1.50

 

$1.25

 

$0.50

 

If monopolists are able to produce fewer goods and sell them at a higher price than they could under perfect competition, the result will be:

 

irregularly high unsustainable profits.

 

government deregulation.

 

elimination of barriers to entry.

 

abnormally high sustained profits

 

Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?

 

Output will be too large and its price too low.

 

Output will be too small and its price too low.

 

Output will be too small and its price too high.

 

Output will be too large and its price too high.

 

In the United States, price discrimination is ________.

 

permitted

 

illegal

 

encouraged

 

Why can a price discriminating monopolist be both more profitable and more efficient (i.e., produce greater net benefits for society)?

 

Because it charges a lower price than a single price monopolist.

 

Because it is more socially conscious than a single price monopolist.

 

Because it supplies a higher quantity of output than a single price monopolist.

 

Regulations that permit a regulated firm to cover its costs and to make a normal level of profit are commonly referred to as:

 

regulatory capture.

 

cost­plus regulation.

 

price cap regulations.

 

profit regulation.

 

If two companies are seeking regulatory approval to merge their respective businesses, which of the following will most likely be the focus of the arguments that they will present in favor of the merger?

 

Consumers can purchase better quality goods or services at a lower price.

 

The newly created firm is able to take advantage of economies of scale.

 

The newly created firm will benefit consumers by operating more efficiently.

 

 

 

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