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Chapter 10- monopoly

Total questions: 12

Worksheet time: 7mins

Name
Class
Date
1.

A single-price monopoly is characterized by a marginal revenue curve that is

a)

upward sloping.

b)

downward sloping.

c)

horizontal.

d)

vertical.

2.

A barrier to entry is

a)

an economic term for economies of scale

b)

illegal in most markets

c)

anything that prevents new firms from entering the market

d)

a factor that increases competition

3.

A type of monopoly that arises because a single firm can supply a good or service to an entire market at a lower cost than could two or more firms.

a)

Monopoly

b)

Natural Monopoly

c)

Price Discrimination

d)

Cartel

4.

The profit-maximizing combination of output and price for a single-price monopoly is:

a)
Q1 & P1
b)
Q2 & P3
c)
Q1 & P4
d)
Q3 & P2
5.
For this monopolist, what is the area of consumer surplus?
a)

A,B,H,J

b)

A,J,G,C

c)

A,R,J

d)

A,R,J,E

6.

Dead weight loss for this monopoly are represented by area:

a)
BKL0
b)

J,H,N

c)

J,K,N

d)

J,G,N

7.
What is the area above the supply curve, up to the price line, that represents the benefit gained by producers?
a)
Producer Surplus
b)
Monopoly Surplus
c)
Deadweight Loss
d)
Consumer Surplus
8.
What is the reason that the government interferes with monopolies in order to protect society's overall well-being?
a)
Deadweight Loss
b)
Producer Surplus
c)
Consumer Surplus
d)
Monopoly Benefits
9.

If a monopoly sales tax on each unit sold increases the price from $15 to $16, what is the new quantity demanded?

a)
4
b)
5
c)
6
d)
3
10.

What happens to the marginal revenue of a monopoly when it increases output by one unit?

a)

It becomes equal to price

b)

It decreases

c)

It increases

d)

It remains constant

11.

Which area on a monopoly graph typically represents the loss in total surplus due to market power?

a)

Total revenue

b)

Deadweight loss

c)

Consumer surplus

d)

Producer surplus

12.

What is the relationship between marginal cost and marginal revenue at the profit-maximizing output for a monopoly?

a)

Marginal cost equals marginal revenue

b)

Marginal cost is greater than marginal revenue

c)

Marginal cost is less than marginal revenue

d)

Marginal cost is unrelated to marginal revenue