If a monopolist is producing at the profit-maximizing level of output, what price will it charge?
a. The price given by the marginal-revenue curve at that level of output.
b. The price given by the marginal-cost curve at that level of output.
c. The price given by the average-cost curve at that level of output.
d. The price given by the average-revenue curve at that level of output.
e. The price given by the total revenue curve at that level of output.
QUESTION 2Necessary conditions for price discrimination include:
a. identical tastes among buyers.
b. differences in willingness to pay among customers.
c. easy resale.
d. both (b) and (c)
QUESTION 3Which of the following can be categorized as a commodity money standard?
a. The pegged exchange rate standard
b. The free float standard
c. The managed float standard
d. The reserve currency standard
e. The gold standard
QUESTION 4In the small country of Talisman, the liquor industry is monopolized by a single producer Best Drinks Inc Best Drinks charges high end customers like 5-star hotels a much higher price than it charges local pubs. Identify the correct statement from the following.
a. Best Drinks is aware of the variations in the valuation of its products by different consumer segments.
b. Best Drinks minimizes cost by charging different consumers different prices.
c. Charging different prices for different consumers increases consumer surplus.
d. Best Drinks charges different prices because its sole objective is sales maximization.
QUESTION 5If at an output of 10 units a monopolist is earning a positive profit, marginal revenue is 6, and marginal cost is 4, then the monopolist:
a. is in equilibrium.
b. should increase output.
c. should reduce output.
d. should lower the price at the current output level.
e. should raise the price at the current output level.
QUESTION 6Which of the following is an example where price discrimination occurs?
a. quantity discounts
b. Disney World
c. theatres in New York City
d. all of the above
QUESTION 7The gold standard ended with the:
a. rise of Napoleon to power.
b. American Declaration of Independence.
c. outbreak of World War I.
d. first Arab oil embargo.
e. presidency of Richard Nixon.
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