ECS2601 Assignment 5 Semester 1 2023
Questions and Answers
Grade 80.00 out of 100.00
Which of the following statements regarding a profit-maximising monopolist is FALSE?
a. This firm would respond to a fall in the price of a variable input by increasing its output and reducing its price.
b. This firm would respond to a fall in the price of a fixed input by increasing its output and reducing its price.
c. This firm might respond to a fall in demand by reducing both its output and its price.
d. This firm might respond to a fall in demand by reducing its output and increasing its price.
Question 2
Complete
Which condition/s can give rise to a monopoly power?
Mark 2.00 out of
2.00
a. All of the options are correct
b. Brand dominance.
c. Cost advantages
d. Positive externalities.
Question 3
Complete
A natural monopoly exists in an industry with constant returns to scale.
Mark 2.00 out of
2.00
Select one:
True
False
Question 4
Complete
Suppose a monopolistically competitive firm is making a profit in the short run. As new firms enter, the incumbent firm’s demand and marginal revenue curves shift inward, reducing
Mark 2.00 out of
the profit-maximizing quantity.
2.00
Select one:
True
False
Question 5
Complete
What do the Cournot and Bertrand models have in common?
Mark 2.00 out of
2.00
a. Both are oligopoly models in which firms produce a good that the consumer cannot easily substitute.
b. In both models, each firm takes some aspect of its rivals behavior (either quantity or price) as fixed when making its own decision.
c. The two models have nothing in common.
d. None of the options are correct
,Question 6
Complete
A natural monopoly is typically characterised by …
Mark 2.00 out of
2.00
Dashboard Calendar
a. marginal costs (MC) that are lower than AC for large quantities of output.
Dashboard / Courses / UNISA
b. low/ fixed
2023costs
/ Semester
(FC) but 1very
/ ECS2601-23-S1 / Welcome
high variable costs (VC). Message / Assessment 5
c. increasing average costs (AC), which makes it hard for new entrants to enter the industry.
d. highly elastic product demand curves.
Question 7
Complete
Price discrimination based on the quantity consumed is referred to as … price discrimination.
Mark 2.00 out of
2.00
a. second-degree
b. third-degree
c. first-degree
d. group
Question 8
Complete
Second-degree price discrimination is the practice of charging
Mark 2.00 out of
2.00
a.
each customer the maximum price that he or she is willing to pay.
b. the reservation price to each customer.
c. different prices for different quantity blocks of the same good or service.
d. different groups of customers different prices for the same products.
Question 9
Complete
Given the relationship between the demand curve (Demand) and the marginal revenue (MR) curve of a monopolist in terms of their steepness (slope), What is the MR curve function ,
Mark 3.00 out of
when the Demand curve function is given by:
3.00
P = 100 - 4Q
a. MR = 50 - 2Q
b. MR = 200 - 8Q
c. MR = 100 - 8Q
d. MR = 100 - 2Q
Question 10
Complete
For a monopolist, the one-to-one correlation between the price and the seller’s quantity is non-existent, hence the absence of the market supply curve.
Mark 2.00 out of
2.00
Select one:
True
False
Question 11
Complete
Which oligopoly model would be most desirable from the point of view of the consumer?
Mark 2.00 out of
2.00
a. Cournot.
b. Monopoly collusion.
c. Stackelberg.
d. Bertrand.
,Question 12
Complete
Given the previous unit sold, the monopolist earns less revenue from that unit due to a reduced price.
Mark 0.00 out of
2.00
Select one:
Dashboard Calendar
True
Dashboard / Courses / UNISA / 2023 / Semester 1 / ECS2601-23-S1 / Welcome Message / Assessment 5
False
Question 13
Complete
Refer to the table below to answer the question.
Mark 2.00 out of
2.00
a.
Player one picks A and player 2 picks B.
b. Player one picks B and player 2 picks A.
c.
Both players pick B.
d. Both players pick A
Question 14
Complete
Which of the following is correct regarding a pure monopoly?
Mark 2.00 out of
2.00
a. Monopolies can be price-discriminating.
b.
Monopolies are efficient.
c. Demand is the same as the marginal revenue.
d.
Monopolies are state-owned.
Question 15
Complete
Consider the following functions faced by a monopolist:
Mark 0.00 out of
3.00 Demand: P=20-2Q
MR=20-4Q
MC=5+Q
At which level of output is profit being maximised?
a. 2
b. 3
c. 10
d. 5
, Question 16
Complete
Mark 3.00 out of
A firm faces the following average revenue (demand) curve:
3.00 P = 120 – 0.02Q
Dashboard Calendar
where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits.
Dashboard / Courses If
/ the government
UNISA / 2023 /decides to levy
Semester 1 / aECS2601-23-S1
unit tax of 14 cents per unitMessage
/ Welcome on this product, what will
/ Assessment 5 be the new level of profit?
a. 6450 cents per week
b. 359 250 cents per week.
c. 9800 cents per week.
d. 1450 cents per week.
Question 17
Complete
An cement making monopolist with a marginal cost curve of MC=Q was originally faced with a demand curve:
Mark 0.00 out of
3.00 P=20-2Q.
However, due to an increase in demand for housing, demand shifted to:
P=35-2Q.
Calculate the change in price and quantity due to this shift in demand.
a. An increase in P = 12, and increase in Q = 4.
b. Impossible to determine with the given information.
c. An increase in P = 9, and increase in Q = 3.
d. An increase in P = 21, and increase in Q = 7
Question 18
Complete
In the Stackelberg model, the firm that sets output first has an advantage.
Mark 2.00 out of
2.00
Select one:
True
False
◄ Assessment 4 Jump to... Assessment 6 ►
Questions and Answers
Grade 80.00 out of 100.00
Which of the following statements regarding a profit-maximising monopolist is FALSE?
a. This firm would respond to a fall in the price of a variable input by increasing its output and reducing its price.
b. This firm would respond to a fall in the price of a fixed input by increasing its output and reducing its price.
c. This firm might respond to a fall in demand by reducing both its output and its price.
d. This firm might respond to a fall in demand by reducing its output and increasing its price.
Question 2
Complete
Which condition/s can give rise to a monopoly power?
Mark 2.00 out of
2.00
a. All of the options are correct
b. Brand dominance.
c. Cost advantages
d. Positive externalities.
Question 3
Complete
A natural monopoly exists in an industry with constant returns to scale.
Mark 2.00 out of
2.00
Select one:
True
False
Question 4
Complete
Suppose a monopolistically competitive firm is making a profit in the short run. As new firms enter, the incumbent firm’s demand and marginal revenue curves shift inward, reducing
Mark 2.00 out of
the profit-maximizing quantity.
2.00
Select one:
True
False
Question 5
Complete
What do the Cournot and Bertrand models have in common?
Mark 2.00 out of
2.00
a. Both are oligopoly models in which firms produce a good that the consumer cannot easily substitute.
b. In both models, each firm takes some aspect of its rivals behavior (either quantity or price) as fixed when making its own decision.
c. The two models have nothing in common.
d. None of the options are correct
,Question 6
Complete
A natural monopoly is typically characterised by …
Mark 2.00 out of
2.00
Dashboard Calendar
a. marginal costs (MC) that are lower than AC for large quantities of output.
Dashboard / Courses / UNISA
b. low/ fixed
2023costs
/ Semester
(FC) but 1very
/ ECS2601-23-S1 / Welcome
high variable costs (VC). Message / Assessment 5
c. increasing average costs (AC), which makes it hard for new entrants to enter the industry.
d. highly elastic product demand curves.
Question 7
Complete
Price discrimination based on the quantity consumed is referred to as … price discrimination.
Mark 2.00 out of
2.00
a. second-degree
b. third-degree
c. first-degree
d. group
Question 8
Complete
Second-degree price discrimination is the practice of charging
Mark 2.00 out of
2.00
a.
each customer the maximum price that he or she is willing to pay.
b. the reservation price to each customer.
c. different prices for different quantity blocks of the same good or service.
d. different groups of customers different prices for the same products.
Question 9
Complete
Given the relationship between the demand curve (Demand) and the marginal revenue (MR) curve of a monopolist in terms of their steepness (slope), What is the MR curve function ,
Mark 3.00 out of
when the Demand curve function is given by:
3.00
P = 100 - 4Q
a. MR = 50 - 2Q
b. MR = 200 - 8Q
c. MR = 100 - 8Q
d. MR = 100 - 2Q
Question 10
Complete
For a monopolist, the one-to-one correlation between the price and the seller’s quantity is non-existent, hence the absence of the market supply curve.
Mark 2.00 out of
2.00
Select one:
True
False
Question 11
Complete
Which oligopoly model would be most desirable from the point of view of the consumer?
Mark 2.00 out of
2.00
a. Cournot.
b. Monopoly collusion.
c. Stackelberg.
d. Bertrand.
,Question 12
Complete
Given the previous unit sold, the monopolist earns less revenue from that unit due to a reduced price.
Mark 0.00 out of
2.00
Select one:
Dashboard Calendar
True
Dashboard / Courses / UNISA / 2023 / Semester 1 / ECS2601-23-S1 / Welcome Message / Assessment 5
False
Question 13
Complete
Refer to the table below to answer the question.
Mark 2.00 out of
2.00
a.
Player one picks A and player 2 picks B.
b. Player one picks B and player 2 picks A.
c.
Both players pick B.
d. Both players pick A
Question 14
Complete
Which of the following is correct regarding a pure monopoly?
Mark 2.00 out of
2.00
a. Monopolies can be price-discriminating.
b.
Monopolies are efficient.
c. Demand is the same as the marginal revenue.
d.
Monopolies are state-owned.
Question 15
Complete
Consider the following functions faced by a monopolist:
Mark 0.00 out of
3.00 Demand: P=20-2Q
MR=20-4Q
MC=5+Q
At which level of output is profit being maximised?
a. 2
b. 3
c. 10
d. 5
, Question 16
Complete
Mark 3.00 out of
A firm faces the following average revenue (demand) curve:
3.00 P = 120 – 0.02Q
Dashboard Calendar
where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 60Q + 25,000. Assume that the firm maximizes profits.
Dashboard / Courses If
/ the government
UNISA / 2023 /decides to levy
Semester 1 / aECS2601-23-S1
unit tax of 14 cents per unitMessage
/ Welcome on this product, what will
/ Assessment 5 be the new level of profit?
a. 6450 cents per week
b. 359 250 cents per week.
c. 9800 cents per week.
d. 1450 cents per week.
Question 17
Complete
An cement making monopolist with a marginal cost curve of MC=Q was originally faced with a demand curve:
Mark 0.00 out of
3.00 P=20-2Q.
However, due to an increase in demand for housing, demand shifted to:
P=35-2Q.
Calculate the change in price and quantity due to this shift in demand.
a. An increase in P = 12, and increase in Q = 4.
b. Impossible to determine with the given information.
c. An increase in P = 9, and increase in Q = 3.
d. An increase in P = 21, and increase in Q = 7
Question 18
Complete
In the Stackelberg model, the firm that sets output first has an advantage.
Mark 2.00 out of
2.00
Select one:
True
False
◄ Assessment 4 Jump to... Assessment 6 ►
