PASAR MONOPOLI

Table 15-1

Total Average Marginal

Quantity Price Revenue Revenue Revenue
1 35 35
2 64 32 29
3 29
4 17
5 23 11
6 120
7 17 -1
8 -7
9 99 11 -13
10 80 8

1. Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it receive from the
sale?
a. 14
b. 40
c. 112
d. 164
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative
2. Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it
sell?
a. 4
b. 5
c. 6
d. 8
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative
3. Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?
a. 17
b. 21
c. 23
d. 26
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Average revenue MSC: Applicative
4. Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?
a. 3
b. 5
c. 11
d. 17
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal revenue MSC: Applicative
5. Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $12. What quantity of output (Q) will it
produce and what price (P) will it charge?
a. Q = 4, P = $29
b. Q = 4, P = $26
c. Q = 5, P = $23
d. Q = 7, P = $17
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Applicative
 6. Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it receive from the
sale?
a. 14
b. 40
c. 112
d. 164
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative
7. Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it
sell?
a. 4
b. 5
c. 6
d. 8
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative
8. Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?
a. 17
b. 21
c. 23
d. 26
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Average revenue MSC: Applicative
9. Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?
a. 3
b. 5
c. 11
d. 17
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal revenue MSC: Applicative
10. Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $12. What quantity of output (Q) will it
produce and what price (P) will it charge?
a. Q = 4, P = $29
b. Q = 4, P = $26
c. Q = 5, P = $23
d. Q = 7, P = $17
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Applicative
 11. Refer to Table 15-1. If the monopolist sells 8 units of its product, how much total revenue will it receive from the
sale?
a. 14
b. 40
c. 112
d. 164
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative
12. Refer to Table 15-1. If the monopolist wants to maximize its revenue, how many units of its product should it
sell?
a. 4
b. 5
c. 6
d. 8
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative
13. Refer to Table 15-1. When 4 units of output are produced and sold, what is average revenue?
a. 17
b. 21
c. 23
d. 26
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Average revenue MSC: Applicative
14. Refer to Table 15-1. What is the marginal revenue for the monopolist for the sixth unit sold?
a. 3
b. 5
c. 11
d. 17
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal revenue MSC: Applicative
15. Refer to Table 15-1. Assume this monopolist's marginal cost is constant at $12. What quantity of output (Q) will it
produce and what price (P) will it charge?
a. Q = 4, P = $29
b. Q = 4, P = $26
c. Q = 5, P = $23
d. Q = 7, P = $17
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Applicative
Figure 15-2
The figure below illustrates the cost and revenue structure for a monopoly firm.

16. Refer to Figure 15-2. The demand curve for a monopoly firm is depicted by curve
a. A.
b. B.
c. C.
d. D.
ANS: A PTS: 1 DIF: 1 REF: 15-2
TOP: Demand curve MSC: Interpretive
17. Refer to Figure 15-2. The marginal revenue curve for a monopoly firm is depicted by curve
a. A.
b. B.
c. C.
d. D.
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal revenue MSC: Interpretive
18. Refer to Figure 15-2. The marginal cost curve for a monopoly firm is depicted by curve
a. A.
b. B.
c. C.
d. D.
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal cost MSC: Interpretive
19. Refer to Figure 15-2. The average total cost curve for a monopoly firm is depicted by curve
a. A.
b. B.
c. C.
d. D.
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Average total cost MSC: Interpretive
 20. Refer to Figure 15-2. If the monopoly firm is currently producing Q3 units of output, then a decrease in output
will necessarily cause profit to
a. remain unchanged.
b. decrease.
c. increase as long as the new level of output is at least Q2.
d. increase as long as the new level of output is at least Q1.
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Analytical
21. Refer to Figure 15-2. Profit can always be increased by increasing the level of output by one unit if the
monopolist is currently operating at
(i) Q0.
(ii) Q1.
(iii)Q2.
(iv)
Q3.
a. (i) or (ii)
b. (i), (ii) or (iii)
c. (iii) or (iv)
d. (iv) only
ANS: A PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Analytical
22. Refer to Figure 15-2. If the monopoly firm wants to maximize its profit, it should operate at a level of
output equal to
a. Q1.
b. Q2.
c. Q3.
d. Q4.
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Analytical
23. Refer to Figure 15-2. Profit will be maximized by charging a price equal to
a. P0.
b. P1.
c. P2.
d. P3.
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Analytical

Figure 15-3
The figure below illustrates the cost and revenue structure for a monopoly firm.
 24. Refer to Figure 15-3. A profit-maximizing monopoly's total revenue is equal to
a. P3 × Q2.
b. P2 × Q4.
c. (P3 – P0) × Q2.
d. (P3 – P0) × Q4.
ANS: A PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Analytical
25. Refer to Figure 15-3. A profit-maximizing monopoly's total cost is equal to
a. (P1 – P0) × Q2.
b. P0 × Q1.
c. P0 × Q2.
d. P0 × Q3.
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total cost MSC: Analytical
26. Refer to Figure 15-3. A profit-maximizing monopoly's profit is equal to
a. P3 × Q2.
b. P2 × Q4.
c. (P3 – P0) × Q2.
d. (P3 – P0) × Q4.
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Profit MSC: Analytical
 27. Refer to Figure 15-3. Profit on a typical unit sold for a profit-maximizing monopoly would equal
a. P2 – P1.
b. P2 – P0.
c. P3 – P2.
d. P3 – P0.
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Profit MSC: Analytical
28. Refer to Figure 15-3. At the profit-maximizing level of output,
a. marginal revenue is equal to P3.
b. marginal cost is equal to P3.
c. average revenue is equal to P3.
d. average total cost is equal to P1.
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Average revenue MSC: Interpretive
Table 15-2
Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information.

COSTS REVENUES
Quantity Total Cost Marginal Quantity Price Total Marginal
Produced ($) Cost Demanded ($/unit) Revenue Revenue
0 100 -- 0 170 --
1 140 1 160
2 184 2 150
3 230 3 140
4 280 4 130
5 335 5 120
6 395 6 110
7 475 7 100
8 565 8 90

29. Refer to Table 15-2. What is the marginal cost of the 6th shirt?
a. $44 b. $46
c. $55
d. $60
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal cost MSC: Applicative
30. Refer to Table 15-2. What is the marginal cost of the 8th shirt?
a. $50 b. $60 c. $90 d. $110
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal cost MSC: Applicative

31. Refer to Table 15-2. What is the total revenue from selling 6 shirts?
a. $100 b. $600 c. $625
d. $660
ANS: D PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative

32. Refer to Table 15-2. What is the total revenue from selling 8 shirts?
a. $90 b. $695 c. $720 d. $800
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Total revenue MSC: Applicative

33. Refer to Table 15-2. What is the marginal revenue from selling the 2nd shirt?
a. $140 b. $150 c. $160
d. $170
ANS: A PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal revenue MSC: Applicative

34. Refer to Table 15-2. What is the marginal revenue from selling the 8th shirt?
a. $10 b. $20 c. $40 d. $90
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Marginal revenue MSC: Applicative

35. Refer to Table 15-2. What is the average revenue when 7 shirts are sold?
a. $40 b. $90 c. $100
d. $700
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Average revenue MSC: Applicative

36. Refer to Table 15-2. Which of the following quantities will achieve the maximum profit?
a. 3 b. 4 c. 6 d. 7
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Profit maximization MSC: Applicative

37. Refer to Table 15-2. What is total profit at the profit-maximizing quantity?
a. $100 b. $245 c. $265 d. $395
ANS: C PTS: 1 DIF: 2 REF: 15-2
TOP: Profit MSC: Applicative

38. Refer to Table 15-2. What are Dreher's Designer Shirt Company's fixed costs?
a. $0
b. $100 c. $600 d. $745
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Fixed cost MSC: Applicative

39. Refer to Table 15-2. What is the total variable cost of production when six units are produced?
a. $100 b. $295 c. $600 d. $620
ANS: B PTS: 1 DIF: 2 REF: 15-2
TOP: Variable costs MSC: Applicative

Table 15-5
Dreher's Designer Shirt Company, a monopolist, has the following cost and revenue information. Assume that
Dreher’s is able to engage in perfect price discrimination.

COSTS REVENUES
Quantity Total Cost Marginal Quantity Price Total Marginal
Produced ($) Cost Demanded ($) Revenue Revenue
0 100 -- 0 170 --
1 140 1 160
2 184 2 150
3 230 3 140
4 280 4 130
5 335 5 120
6 395 6 110
7 475 7 100
8 575 8 95

40. Refer to Table 15-5. What is the marginal revenue from selling the 5th shirt?
a. $80 b. $100 c. $110
d. $120
ANS: D PTS: 1 DIF: 2 REF: 15-5
TOP: Marginal revenue MSC: Applicative

41. Refer to Table 15-5. What is the marginal revenue from selling the 8th shirt?
a. $45 b. $60 c. $80 d. $95
ANS: D PTS: 1 DIF: 2 REF: 15-5
TOP: Marginal revenue MSC: Applicative

42. Refer to Table 15-5. What is the total revenue when 3 shirts are sold?
a. $140 b. $420 c. $450
d. $620
ANS: C PTS: 1 DIF: 3 REF: 15-5
TOP: Total revenue MSC: Applicative

43. Refer to Table 15-5. What is the total revenue when 7 shirts are sold?
a. $650 b. $700 c. $910 d. $1080
ANS: C PTS: 1 DIF: 3 REF: 15-5
TOP: Total revenue MSC: Applicative

44. Refer to Table 15-5. What is the average revenue when 7 shirts are sold?
a. $90 b. $100 c. $110
d. $130
ANS: D PTS: 1 DIF: 3 REF: 15-5
TOP: Average revenue MSC: Applicative

45. Refer to Table 15-5. What is the quantity that maximizes economic profit?
a. 5 b. 6 c. 7 d. 8
ANS: C PTS: 1 DIF: 3 REF: 15-5
TOP: Profit maximization MSC: Applicative

46. Refer to Table 15-5. What is total profit at the profit-maximizing quantity?
a. $325 b. $435 c. $565
d. $1000
ANS: B PTS: 1 DIF: 3 REF: 15-5
TOP: Profit MSC: Applicative

47. Refer to Table 15-5. What are Dreher's Designer Shirt Company's fixed costs?
a. $100 b. $150 c. $354 d. $654
ANS: A PTS: 1 DIF: 2 REF: 15-5
TOP: Fixed cost MSC: Applicative

48. What do economists call the business practice of selling the same good at difference prices to
different customers?
a. Price discrimination b. Collusion
c. Compensating differential d. Both a and b are correct
ANS: A PTS: 1 DIF: 1 REF: 15-5
TOP: Price discrimination MSC: Definitional