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1、1002Chapter15MonopolyTRUEFALSE1.Monopolistscanachieveanylevelofprofittheydesirebecausetheyhaveunlimitedmarketpower.ANS:FDIF:2REF:150NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpretive2.Evenwithmarketpowermonopolistscann
2、otachieveanylevelofprofittheydesirebecausetheywillselllowerquantitiesathigherprices.ANS:TDIF:2REF:150NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpretive3.Oneacteristicofamonopolymarketisthattheproductisvirtuallyidentica
3、ltoproductsproducedbycompetingfirms.ANS:FDIF:2REF:151NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Definitional4.Thefundamentalcauseofmonopoliesisbarrierstoentry.ANS:TDIF:2REF:151NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpr
4、etive5.TheDeBeersDiamondcompanyadvertisesheavilytopromotethesaleofalldiamondsnotjustitsown.Thisisevidencethatithasamonopolypositiontosomedegree.ANS:TDIF:1REF:151NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpretive6.TheDe
5、BeersDiamondcompanyisnotwriedaboutdifferentiatingitsproductfromallothergemstones.ANS:FDIF:1REF:151NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpretive7.Theamountofpowerthatamonopolyhasdependsonwhetherthereareclosesubstit
6、utesfitsproduct.ANS:TDIF:1REF:151NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Interpretive8.IftheABCcompanyownstheexclusiverightstominelinAfghanistanfLapisLazuliararestoneusedinjewelrywhichisfoundonlyinAfghanistanthecompanybe
7、nefitsfromabarriertoentry.ANS:TDIF:1REF:151NAT:AnalyticLOC:MonopolyTOP:MonopolyMSC:Applicative9.Copyrightspatentsareexamplesofbarrierstoentrythataffdfirmsmonopolypricingpowers.ANS:TDIF:2REF:151NAT:AnalyticLOC:MonopolyTOP
8、:PatentsMSC:Interpretive10.Ifthegovernmentdeemsanewlyinventeddrugtobetrulyiginalthepharmaceuticalcompanyisgiventheexclusiverighttomanufacturesellthedrugf50years.ANS:FDIF:1REF:151NAT:AnalyticLOC:MonopolyTOP:PatentsMSC:Int
9、erpretive11.Anaturalmonopolyhaseconomiesofscalefmostifnotallofitsrangeofoutput.ANS:TDIF:2REF:151NAT:AnalyticLOC:MonopolyTOP:NaturalmonopolyMSC:Applicative12.Decliningaveragetotalcostwithincreasedproductionisoneofthedefin
10、ingacteristicsofanaturalmonopoly.ANS:TDIF:1REF:151NAT:AnalyticLOC:MonopolyTOP:NaturalmonopolyMSC:Definitional1004?Chapter15Monopoly27.Amonopolycreatesadeadweightlosstosocietybecauseitearnsbothshtrunlongrunpositiveeconomi
11、cprofits.ANS:FDIF:2REF:153NAT:AnalyticLOC:MonopolyTOP:DeadweightlossMSC:Interpretive28.Amonopolycreatesadeadweightlosstosocietybecauseitproduceslessoutputthanthesociallyefficientlevel.ANS:TDIF:2REF:153NAT:AnalyticLOC:Mon
12、opolyTOP:DeadweightlossMSC:Interpretive29.Supposeaprofitmaximizingmonopolistfacesaconstantmarginalcostof$10producesanoutputlevelof100unitsgesapriceof$50.Thesociallyefficientlevelofoutputis200units.Assumethatthedemcurvema
13、rginalrevenuecurvearethetypicaldownwardslopingstraightlines.Themonopolydeadweightlossequals$4000.ANS:FDIF:3REF:153NAT:AnalyticLOC:MonopolyTOP:DeadweightlossMSC:Analytical30.Supposeaprofitmaximizingmonopolistfacesaconstan
14、tmarginalcostof$10producesanoutputlevelof100unitsgesapriceof$50.Thesociallyefficientlevelofoutputis200units.Assumethatthedemcurvemarginalrevenuecurvearethetypicaldownwardslopingstraightlines.Themonopolydeadweightlossequa
15、ls$2000.ANS:TDIF:3REF:153NAT:AnalyticLOC:MonopolyTOP:DeadweightlossMSC:Analytical31.Supposeaprofitmaximizingmonopolistfacesaconstantmarginalcostof$20producesanoutputlevelof100unitsgesapriceof$50.Thesociallyefficientlevel
16、ofoutputis200units.Assumethatthedemcurvemarginalrevenuecurvearethetypicaldownwardslopingstraightlines.Themonopolydeadweightlossequals$1500.ANS:TDIF:3REF:153NAT:AnalyticLOC:MonopolyTOP:DeadweightlossMSC:Analytical32.Inder
17、fafirmtomaximizeprofitsthroughpricediscriminationthefirmmusthavesomemarketpowerbeabletopreventarbitrage.ANS:TDIF:2REF:154NAT:AnalyticLOC:MonopolyTOP:PricediscriminationMSC:Interpretive33.Pricediscriminationisprohibitedby
18、antitrustlaws.ANS:FDIF:2REF:154NAT:AnalyticLOC:MonopolyTOP:PricediscriminationMSC:Interpretive34.Amonopolistearnshigherprofitsbygingonepricethanbypracticingpricediscrimination.ANS:FDIF:3REF:154NAT:AnalyticLOC:MonopolyTOP
19、:PricediscriminationMSC:Interpretive35.Amonopolistthatcanpracticeperfectpricediscriminationwillnotimposeadeadweightlossonsociety.ANS:TDIF:3REF:154NAT:AnalyticLOC:MonopolyTOP:PerfectpricediscriminationMSC:Interpretive36.B
20、ysellinghardcoverbookstodiehardfanspaperbackbookstolessenthusiasticreadersthepublisherisabletopricediscriminateraiseitsprofits.ANS:TDIF:1REF:154NAT:AnalyticLOC:MonopolyTOP:PricediscriminationMSC:Interpretive37.Movietheat
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