201-tutorial-10 - Econ 201 Tutorial #10 Date: Week of Mar....

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Econ 201 Tutorial #10 Date: Week of Mar. 29- Apr. 4, 2010 Coverage: Chapter 10 Monopoly I. Multiple Choice Questions: 1. As the only seller, a monopolist can always a. Avoid economic losses. b. Earn an economic profit. c. Incur a loss. d. None of the above. 2. In the short run, a monopolist with a loss of $50, along with marginal revenue of $15, and marginal cost of $10, should a. Shut down. b. Expand output and raise price. c. Expand output and cut price. d. Cut output and raise price. 3. Inefficiency results from monopoly because a. There is no competition to force down costs. b. High monopoly prices are not equitable. c. A monopoly underproduces relative to the ideal at which society’s marginal cost=marginal benefit. d. All of the above. 4. If a monopoly is maximizing profit, then the marginal cost of producing one more unit is a. More than its marginal benefit to society. b. Less than its marginal benefit to society. c. Less than its marginal benefit to the monopoly firm. d. None of the above. 5. Monopoly results because of a. Barriers to entry into the industry. b. Greed by the seller. c. Lack of interest by potential competitors. d. Inadequate regulation by government. Table 1 Type of User Elasticity of Demand Commercial 1.1 Industrial 3.0 Household 2.0 Government 1.2 6. Refer to Table 1. A price-discriminating monopoly would charge the highest price to a. Commercial users. b. Industrial users. c. Household users. d. Government. 7. Refer to Table 1. A price-discriminating monopoly would charge the lowest price to a. Commercial users. b. Industrial users. c. Household users. d. Government. 8.
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This note was uploaded on 11/26/2010 for the course ECON 201 taught by Professor Ianirvine during the Spring '10 term at Concordia University Irvine.

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201-tutorial-10 - Econ 201 Tutorial #10 Date: Week of Mar....

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