Econ 102 Study Guide Questions/Answer 2025/2026
Graded A+
Suppose a firm has a monopoly on the scale of a computer game and faces a
downward-sloping demand curve. When selling the 36th game, the firm will always
receive? - Less marginal revenue on the 36th game than it received on the 35th game.
A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301
units of output for $43.60 per unit. The marginal revenue of output is? - -$376.40
Which of the following statements is correct? - Panel B represents the typical demand
curve for a perfectly competitive firm, and Panel A represents the typical demand curve
for a monopoly.
In order to maximize profits, the monopolist should produce? - 12 units
In order to maximize profits, the monopolist should charge a price of? - $20
If the monopolist produces 5 units, what is it average revenue? - $18
What price should the firm charge to maximize profit? - $7
A monopolist will choose to increase output when? - At the present level of output,
marginal revenue exceeds marginal cost.
Suppose a monopolist charges a price of $27 for its product and sells 10 units at that
price. At 10 units of production, the firm has an average fixed cost equal to $10 and an
average variable cost equal to $13. How much total profit is the firm earning at this
price? - $40
Based upon the information shown, what is the total revenue for Bearclaws, given that it
maximizes profits? - $980
The marginal revenue curve for a monopoly firm is depicted by curve? - A
Given that Bearclaws chooses the profit maximizing price and quantity, what profit level
will it obtain? - $280
The deadweight loss that arises from a monopoly is a consequence of the fact that the
monopoly... - Quantity is lower than the socially optimal quantity
The deadweight loss caused by a profit-maximizing monopoly amounts to? - $500
A benevolent social planner would have the monopoly operate at an output level... -
Equal to Q0
, If the monopoly operates at an output level less than Q0, then an increase in output
toward (but not exceeding) Q0 would? - Lower the price and raise total surplus
Price discrimination requires the firm to? - Separate customers according to their
willingness to pay.
Financial aid to college students, quantity discounts, and senior citizen discounts are all
discounts are examples of? - Price discrimination
How much additional profit can the concert promoters earn by charging customer their
willingness to pay relative to charging a flat rate of $150 per ticket? - ACG
If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to?
- $0
The higher the concentration ratio, the - More control an individual firm has to set prices
What is the concentration ratio in Industry B? - Approximately 56%
Based on the concentration ratio, which industry is the most competitive? - Industry B
In a monopolistically competitive market? - Firms can enter or exit the market without
restrictions.
Monopolistic competition differs from perfect competition because in monopolistically
competitive markets? - Each of the sellers offer a somewhat different product.
In a monopolistically competitive industry, firms set price. - Above marginal cost since
each firm is a price setter.
The firm's profit-maximizing level of output is? - 24 units
In order to maximize profit, the firm will charge a price of? - $36
If the average total cost is $30 at the profit-maximizing quantity, then the maximum
profit is? - $144
Which of the panels depicts a firm in a monopolistically competitive market earning
positive economic profits? - Panel C
As the figure is drawn, the firm is in - A short-term equilibrium but it is not in a long run
equilibrium.
In response to the situation, represented by the figure, we would expect? - -The
demand for this firm's product to increase, assuming this firm does not exist
Graded A+
Suppose a firm has a monopoly on the scale of a computer game and faces a
downward-sloping demand curve. When selling the 36th game, the firm will always
receive? - Less marginal revenue on the 36th game than it received on the 35th game.
A monopolist can sell 300 units of output for $45 per unit. Alternatively, it can sell 301
units of output for $43.60 per unit. The marginal revenue of output is? - -$376.40
Which of the following statements is correct? - Panel B represents the typical demand
curve for a perfectly competitive firm, and Panel A represents the typical demand curve
for a monopoly.
In order to maximize profits, the monopolist should produce? - 12 units
In order to maximize profits, the monopolist should charge a price of? - $20
If the monopolist produces 5 units, what is it average revenue? - $18
What price should the firm charge to maximize profit? - $7
A monopolist will choose to increase output when? - At the present level of output,
marginal revenue exceeds marginal cost.
Suppose a monopolist charges a price of $27 for its product and sells 10 units at that
price. At 10 units of production, the firm has an average fixed cost equal to $10 and an
average variable cost equal to $13. How much total profit is the firm earning at this
price? - $40
Based upon the information shown, what is the total revenue for Bearclaws, given that it
maximizes profits? - $980
The marginal revenue curve for a monopoly firm is depicted by curve? - A
Given that Bearclaws chooses the profit maximizing price and quantity, what profit level
will it obtain? - $280
The deadweight loss that arises from a monopoly is a consequence of the fact that the
monopoly... - Quantity is lower than the socially optimal quantity
The deadweight loss caused by a profit-maximizing monopoly amounts to? - $500
A benevolent social planner would have the monopoly operate at an output level... -
Equal to Q0
, If the monopoly operates at an output level less than Q0, then an increase in output
toward (but not exceeding) Q0 would? - Lower the price and raise total surplus
Price discrimination requires the firm to? - Separate customers according to their
willingness to pay.
Financial aid to college students, quantity discounts, and senior citizen discounts are all
discounts are examples of? - Price discrimination
How much additional profit can the concert promoters earn by charging customer their
willingness to pay relative to charging a flat rate of $150 per ticket? - ACG
If the monopoly firm perfectly price discriminates, then the deadweight loss amounts to?
- $0
The higher the concentration ratio, the - More control an individual firm has to set prices
What is the concentration ratio in Industry B? - Approximately 56%
Based on the concentration ratio, which industry is the most competitive? - Industry B
In a monopolistically competitive market? - Firms can enter or exit the market without
restrictions.
Monopolistic competition differs from perfect competition because in monopolistically
competitive markets? - Each of the sellers offer a somewhat different product.
In a monopolistically competitive industry, firms set price. - Above marginal cost since
each firm is a price setter.
The firm's profit-maximizing level of output is? - 24 units
In order to maximize profit, the firm will charge a price of? - $36
If the average total cost is $30 at the profit-maximizing quantity, then the maximum
profit is? - $144
Which of the panels depicts a firm in a monopolistically competitive market earning
positive economic profits? - Panel C
As the figure is drawn, the firm is in - A short-term equilibrium but it is not in a long run
equilibrium.
In response to the situation, represented by the figure, we would expect? - -The
demand for this firm's product to increase, assuming this firm does not exist
