Download Monopoly Sample Questions

Monopoly Sample Questions
AP Microeconomics
Mr. Bordelon
Quantity (Megawatts)
Price per Megawatt
Total Cost
1
$550
$1,000
2
500
1,075
3
450
1,200
4
400
1,375
5
350
1,600
6
300
1,875
7
250
2,200
8
200
2,575
Lenoia runs a natural monopoly producing electricity for a small mountain
village. The table shows Lenoia’s demand and total cost of producing
electricity. The price effect of increasing production from 3 to 4 megawatts is:
a.-$150.
b.$500.
c.$450.
d.-$50.
e.-$400.
Quantity (Megawatts)
Price per Megawatt
Total Cost
1
$550
$1,000
2
500
1,075
3
450
1,200
4
400
1,375
5
350
1,600
6
300
1,875
7
250
2,200
8
200
2,575
Lenoia runs a natural monopoly producing electricity for a small mountain
village. The table shows Lenoia’s demand and total cost of producing
electricity. The price effect of increasing production from 3 to 4 megawatts is:
a.-$150.
b.$500.
c.$450.
d.-$50.
e.-$400.
Assume there are no fixed costs and AC = MC. In the figure,
at the profit-maximizing quantity of production for the
monopolist, total revenue is _____, total cost is _____, and
profit is _____.
a. $600; $200; $400
b. $1,600; $3,200; $1,600
c. $4,800; $3,200; $1,600
d. $4,800; $1,600; $3,200
e. $1,600; $800; $800
Assume there are no fixed costs and AC = MC. In the figure,
at the profit-maximizing quantity of production for the
monopolist, total revenue is _____, total cost is _____, and
profit is _____.
a. $600; $200; $400
b. $1,600; $3,200; $1,600
c. $4,800; $3,200; $1,600
d. $4,800; $1,600; $3,200
e. $1,600; $800; $800
The profit-maximizing firm in this figure will produce
_____ units of output per week.
a. 160
b. 220
c. 250
d. 300
e. 0
The profit-maximizing firm in this figure will produce
_____ units of output per week.
a. 160
b. 220
c. 250
d. 300
e. 0
This profit-maximizing monopoly firm’s cost per unit at
its profit-maximizing quantity is:
a.$8.
b.$15.
c.$16.
d.$18.
e.$35.
This profit-maximizing monopoly firm’s cost per unit at
its profit-maximizing quantity is:
a.$8.
b.$15.
c.$16.
d.$18.
e.$35.
This profit-maximizing monopoly firm’s price per unit is:
a.$20.
b.$26.
c.$29.
d.$35.
e.$16.
This profit-maximizing monopoly firm’s price per unit is:
a.$20.
b.$26.
c.$29.
d.$35.
e.$16.
This profit-maximizing monopoly firm’s profit per unit is:
a.$5.
b.$13.
c.$14.
d.$20.
e.$2.
This profit-maximizing monopoly firm’s profit per unit is:
a.$5.
b.$13.
c.$14.
d.$20.
e.$2.
A natural monopoly exists when:
a.a few firms collude to make one large firm.
b.economies of scale provide large cost
advantages to having one firm produce the
industry’s output.
c.firms naturally maximize profit regardless of
market structure.
d.firms enter the industry as a result of profit
incentives.
e.government creates a natural barrier to entry
for other firms.
A natural monopoly exists when:
a.a few firms collude to make one large firm.
b.economies of scale provide large cost
advantages to having one firm produce the
industry’s output.
c.firms naturally maximize profit regardless of
market structure.
d.firms enter the industry as a result of profit
incentives.
e.government creates a natural barrier to entry
for other firms.
In the figure, the natural monopoly:
a. would incur an economic profit if regulated to produce where
price is less than marginal cost.
b. would incur an economic profit if regulated to charge a price
equal to average total cost.
c. creates more consumer surplus if regulated to produce either
where price equals marginal cost or price equals average total
cost.
d. creates more consumer surplus if regulated to produce where
price is above the average total cost.
e. eliminates consumer surplus if regulated to produce where price
is above average total cost.
In the figure, the natural monopoly:
a. would incur an economic profit if regulated to produce where
price is less than marginal cost.
b. would incur an economic profit if regulated to charge a price
equal to average total cost.
c. creates more consumer surplus if regulated to produce either
where price equals marginal cost or price equals average total
cost.
d. creates more consumer surplus if regulated to produce where
price is above the average total cost.
e. eliminates consumer surplus if regulated to produce where price
is above average total cost.