monopoly

. A company monopolizes enchanted mirrors. Inverse demand is P=200-3Q and total cost is TC=500+Q^2. If it must charge a single price, what is the profit-maximizing price? A) $110 | B) $125 | C) $140 | D) $160 | E) None of the above

B - $125

2. If a company has a monopoly and can charge only one price, price will equal (MARK ALL THAT APPLY): a) Marginal Revenue | b) Marginal Cost | c) Average Variable Cost | d) Fixed Cost | e) None of the above

e - None of the above

3. A monopolist faces market demand Q=800-5P. For what output range will the firm's revenue be increasing? A) 0<Q<200 | B) 0<Q<400 | C) 0<Q<600 | D) 0<Q<800 | E) None of the above

B - 0<Q<400

4. A monopolist faces P=100-2Q and has TC=20Q+200. What is the deadweight loss due to monopoly, assuming MC would be the supply curve under perfect competition? a) 200 | b) 400 | c) 600 | d) 800 | e) None of the above

b - $400

5. Refer to the figure. An unregulated monopolist has the shown cost curves and demand curve. What price should the government set? a) P_M | b) P_AC | c) P_PC | d) None of the above

b - P_AC, the lowest sustainable uniform price without a subsidy

6. Which actions are consistent with a firm trying to maintain a monopoly or gain market power? (MARK ALL THAT APPLY): a) Petition for consumer-safety regulations | b) Merge with a competitor | c) Ask for tariffs | d) Apply for a patent | e) Buy a key input supplier

a, b, c, d, e - All of the above

7. A monopolist faces Q=180-P, has constant MC=30 and no fixed costs, and can perfectly price discriminate. What is the deadweight loss? a) 2812.5 | b) 1875 | c) 150 | d) 0 | e) None of the above

d - $0

8. Coffee demand is P=150-10Q and a monopolist has C=10q. What is the deadweight loss, assuming MC would be the supply curve under perfect competition? A) 122.5 | B) 245 | C) 490 | D) 980 | E) None of the above

B - $245

9. Which are examples of regulatory capture? (MARK ALL THAT APPLY): a) A transportation agency enforces strict auto-safety regulations | b) A health agency partners closely with major pharmaceutical companies to develop approval standards | c) A banking regulator repeatedly hires Wall Street officials who retain close industry relationships | d) An energy commission requires expensive environmental equipment | e) An agricultural agency offers subsidies and imposes price controls

a, b, c, d, e - All of the above under the answer key's intended interpretation

10. A monopolist faces P=200-5Q and has TC=40Q+300. What is the deadweight loss, assuming MC would be the supply curve under perfect competition? A) $200 | B) $400 | C) $600 | D) $800 | E) None of the above

E - None of the above, because DWL=$640

11. A monopolist faces Q=200-P, has constant MC=20 and no fixed costs. If it charges one price, what will it be? a) $110 | b) $90 | c) $20 | d) $180 | e) None of the above

a - $110

12. Coffee demand is P=120-2Q and a monopolist has C=3q^2. What is the deadweight loss, assuming MC would be the supply curve under perfect competition? a) 72 | b) 36 | c) 18 | d) 9 | e) None of the above

b - $36

13. A monopolist faces P=100-2Q and has TC=20Q+200. What is the deadweight loss due to monopoly, assuming MC would be the supply curve under perfect competition? a) 200 | b) 400 | c) 600 | d) 800 | e) None of the above

b - $400

14. Refer to the figure. An unregulated monopolist has the shown cost curves and demand curve. What price should the government set? a) P_M | b) P_AC | c) P_PC | d) None of the above

b - P_AC, the lowest sustainable uniform price without a subsidy

15. Which actions are consistent with a firm trying to maintain a monopoly or gain market power? (MARK ALL THAT APPLY): a) Petition for consumer-safety regulations | b) Merge with a competitor | c) Ask for tariffs | d) Apply for a patent | e) Buy a key input supplier

a, b, c, d, e - All of the above