Econ 300 Final Exam Questions and Answers
with Complete Solution | New Update 2026
If a monopoly chooses the optimal price instead of the optimal quantity, then its
profits will be - ANSWERS unchanged because the optimal price and quantity
yield the same profit.
A monopoly can't choose both price and quantity because - ANSWERS a
monopoly has the power to set price, not the demand curve.
A firm is a natural monopoly if - ANSWERS one firm can produce the total
output of the market at lower cost than two or more firms could.
A natural monopoly occurs when - ANSWERS All of the above are true.
Piracy of intellectual property, such as music, videos, and software - ANSWERS
may or may not affect social welfare in the short run but reduces innovation in the
long-run.
Only Native American Indian tribes can run casinos in California. These casinos are
spread around the state so that each one is a monopoly in its local community.
California governor Arnold Schwarzenegger negotiated with the state's tribes,
getting them to agree to transfer 10% of their profits to the state in exchange for
concessions. How does a profit tax affect a monopoly's output and price? How
would a monopoly change its behavior if the profit tax were 25% rather than 10%?
(Hint: You may assume that the profit tax refers to the tribe's economic profit.) -
, ANSWERS The tax has no effect on price and quantity; thus, changing the tax
rate also has no effect.
For a monopoly, marginal revenue is less than price because - ANSWERS the
firm must lower price if it wishes to sell more output.
A profit maximizing monopolist - ANSWERS is not guaranteed to make a
positive profit.
Limited government licenses that create a monopoly do so because -
ANSWERS the license is an entry barrier.
Optimal price regulation sets price equal to - ANSWERS marginal cost.
If the government regulates the price a monopoly can charge, and the price ceiling
is set below what the competitive market price would be, then - ANSWERS a
shortage will exist.
If the demand function for a monopoly's product is
p=100-2q, then the firm's marginal revenue function is - ANSWERS MR=100-
4Q
A monopoly will set its price equal to marginal cost when - ANSWERS
consumer demand is infinitely elastic.
Optimal price regulation sets price equal to - ANSWERS marginal cost.
with Complete Solution | New Update 2026
If a monopoly chooses the optimal price instead of the optimal quantity, then its
profits will be - ANSWERS unchanged because the optimal price and quantity
yield the same profit.
A monopoly can't choose both price and quantity because - ANSWERS a
monopoly has the power to set price, not the demand curve.
A firm is a natural monopoly if - ANSWERS one firm can produce the total
output of the market at lower cost than two or more firms could.
A natural monopoly occurs when - ANSWERS All of the above are true.
Piracy of intellectual property, such as music, videos, and software - ANSWERS
may or may not affect social welfare in the short run but reduces innovation in the
long-run.
Only Native American Indian tribes can run casinos in California. These casinos are
spread around the state so that each one is a monopoly in its local community.
California governor Arnold Schwarzenegger negotiated with the state's tribes,
getting them to agree to transfer 10% of their profits to the state in exchange for
concessions. How does a profit tax affect a monopoly's output and price? How
would a monopoly change its behavior if the profit tax were 25% rather than 10%?
(Hint: You may assume that the profit tax refers to the tribe's economic profit.) -
, ANSWERS The tax has no effect on price and quantity; thus, changing the tax
rate also has no effect.
For a monopoly, marginal revenue is less than price because - ANSWERS the
firm must lower price if it wishes to sell more output.
A profit maximizing monopolist - ANSWERS is not guaranteed to make a
positive profit.
Limited government licenses that create a monopoly do so because -
ANSWERS the license is an entry barrier.
Optimal price regulation sets price equal to - ANSWERS marginal cost.
If the government regulates the price a monopoly can charge, and the price ceiling
is set below what the competitive market price would be, then - ANSWERS a
shortage will exist.
If the demand function for a monopoly's product is
p=100-2q, then the firm's marginal revenue function is - ANSWERS MR=100-
4Q
A monopoly will set its price equal to marginal cost when - ANSWERS
consumer demand is infinitely elastic.
Optimal price regulation sets price equal to - ANSWERS marginal cost.
