QUESTION 1 A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. What is the output and the price that...

QUESTION 1

1. A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. What is the output and the price that maximizes profit for this monopolist?
2. Q=0,P=10.
3. Q=2,P=8.
4. Q=4,P=6.
5. Q=8,P=2.
6. None of the above

1 points  

QUESTION 2

1. Consider a monopolist who faces the following demand function: P=10-Q. Which of the following statements is true about the elasticity of demand (ε) and MR?
2. MR>0 when ε<-1.
3. MR>0 when ε=-1.
4. MR>0 when ε>-1.
5. MR is always <0.
6. none of the above.

1 points  

QUESTION 3

1. Assume that individuals are homogeneous and that each has a demand curve of the following form for internet service: P=50-2Q where P is the price per hour and Q is hours per month. Assume the firm has a constant marginal cost of $10. The profit maximising two-part tariff results in the firm selling ______ hours and receiving total revenue of ________ from each consumer:
2. 19: 247.
3. 19: 280:
4. 20: 600.
5. 21: 450.
6. None of the above.

1 points  

QUESTION 4

1. Consider a single price monopolist that has standard U-shaped cost curves. If the monopolist earns positive economic profit, which of the following statements is true?
2. The monopolist sets a price greater than marginal cost.
3. The monopolist sets a price greater than average total cost.
4. The monopolist chooses level of output where marginal revenue is equal to marginal cost.
5. a, b and c are correct.
6. none of the above.

1 points  

QUESTION 5

1. Consider a monopolist that has two types of consumers. The first, students have a demand curve given by the following: QA=120-2P. The second type of consumer are non-students who have the following demand curve: QB=200-4P. If the monopolist has constant marginal and average cost equal to 10, which of the following is true if the monopolist practices third degree price discrimination?
2. The quantity sold to students equals 50 and non-students equals 80.
3. The quantity sold to students equals 50 and non-students equals 30.
4. The quantity sold to students equals 35 and non-students equals 40.
5. The quantity sold to students equals 50 and non-students equals 40.
6. None of the above

1 points  

QUESTION 6

1. Consider a monopolist that has two types of consumers. The first, students have a demand curve given by the following: QA=120-2P. The second type of consumer is non-students who have the following demand curve: QB=200-4P. If the monopolist has constant marginal and average cost equal to 10, which of the following is true if the monopolist practices third degree price discrimination?
2. The price charged to student equals 35 and non-students equals 60.
3. The price charged to student equals 35 and non-students equals 30.
4. The price charged to student equals 60 and non-students equals 100.
5. The price charged to student equals 70 and non-students equals 40.
6. None of the above

1 points  

QUESTION 7

1. Consider a monopolist that has two types of consumers. The first, students have a demand curve given by the following: QA=120-2P. The second type of consumer are non-students who have the following demand curve: QB=200-4P. If the monopolist has constant marginal and average cost equal to 10, which of the following is true if the monopolist practices third degree price discrimination?
2. Total profit earned equals 2150.
3. Total profit earned equals 2250.
4. Total profit earned equals 2650.
5. Total profit earned equals 2850.
6. None of the above

1 points  

QUESTION 8

1. Consider a monopolist who faces the following demand function: P=10-Q. Which of the following statements is true about the monopolist’s marginal revenue (MR) and average revenue (AR)?
2. MR and AR have the same vertical intercept.
3. MR has a horizontal intercept that is half that of the horizontal intercept of AR.
4. MR has a steeper slope than AR.
5. a, b, and c are correct.
6. none of the above.

1 points  

QUESTION 9

1. Assume that all firms in a competitive industry have cost curves given by the following: TC = 100 +10q +4q2. In the short run the price at which a firm shuts down is:
2. 2.
3. 4.
4. 5.
5. 10.
6. Additional information about market demand is required to answer this question.

1 points  

QUESTION 10

1. A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. ? What is the value of the deadweight loss generated by this monopolist?
2. 2
3. 4
4. 6
5. 8
6. None of the above

1 points  

QUESTION 11

1. A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. ? What is the economic profit made by this profit-maximising monopolist if they engage in perfect price discrimination?
2. 32
3. 64
4. 100
5. 121
6. None of the above

1 points  

QUESTION 12

1. Assume that all firms in a competitive industry have cost curves given by the following: TC = 100 +10q +4q2. Further, the market demand curve is given by: P = 100-Q. 
2. In the long run the number of firms in the market equals:
3. 10
4. 50
5. 100
6. 200
7. None of the above.

1 points  

QUESTION 13

1. A monopolist faces a demand curve given by P=10-Q and has constant marginal (and average cost) of 2. ? What is the economic profit made by this profit-maximising monopolist?
2. 0
3. 12
4. 14
5. 16
6. None of the above

1 points  

QUESTION 14

1. Consider a monopolist who faces the following demand function: P=10-Q. Which of the following statements is true about the elasticity of demand (ε) (Hint: Note that ε=) ?
2. ε= 1+.
3. ε= 1-.
4. ε= Q(1+.
5. ε= Q(1-.
6. none of the above.

1 points  

QUESTION 15

1. Consider a monopolist who faces the following demand function: P=10-Q. Which of the following statements is true about the monopolist’s marginal revenue (MR)?
2. MR>0 when Q<5.
3. MR=0 when Q=5.
4. MR<0 when Q>5.
5. a, b, and c are correct.
6. none of the above.

1 points  

QUESTION 16

1. Assume that all firms in a competitive industry have cost curves given by the following: TC = 100 +10q +4q2. In the long run the equilibrium price equals:
2. 10.
3. 30.
4. 50.
5. 100.
6. Additional information about market demand is required to answer this question.

1 points  

QUESTION 17

1. Assume that all firms in a competitive industry have cost curves given by the following: TC = 100 +10q +4q2. Suppose firms in this competitive market face a price of 30. In the short run, which of the following is true.
2. Firms make a positive profit.
3. Firms make a loss.
4. Firms make zero profits.
5. Firms shut down.
6. None of the above.

1 points  

QUESTION 18

1. Assume that individuals are homogeneous and that each has a demand curve of the following form for internet service: P=50-2Q where P is the price per hour and Q is hours per month. Assume the firm has a constant marginal cost of $10. The profit maximising two-part tariff results in the firm setting a per unit price equal to ______ and earning ________ profit from each consumer:
2. 10:400.
3. 12: 589:
4. 31: 361.
5. 31: 589.
6. None of the above.

1 points  

QUESTION 19

1. Assume that all firms in a competitive industry have cost curves given by the following: TC = 100 +10q +4q2. Suppose firms in this competitive market face a price of 60. In the short run, which of the following is true.
2. Firms make a positive profit.
3. Firms make a loss.
4. Firms make zero profits.
5. Firms shut down.
6. None of the above.

1 points  

QUESTION 20

1. Consider a monopolist that faces the following demand curve: P=150-Q. The total cost curve for this monopolist is given by the following: TC=100+10Q+Q2. Which of the following is true?
2. The monopolist will set price equal to 115 and sell 35 units.
3. The monopolist will set price equal to 45 and sell 105 units.
4. The monopolist will set price equal to 30 and sell 120 units.
5. The monopolist will set price equal to 60 and sell 90 units.
6. None of the above.