ECON 201 Final Study Guide Exam Practice Questions and
Answers |Fall 2026/2027 Update | 100% Correct
Question 1
The marginal revenue curve of a monopolist lies below the demand curve because:
a. the marginal revenue curve coincides w/ the average revenue curve
b. the monopolist is a price taker
c. the monopolist must lower price on all units sold in order to sell additional units
d. the demand curve is unit elastic
Correct Answer
c. the monopolist must lower price on all units sold in order to sell additional units
Question 2
A monopolist:
a. can choose any price along the market curve
b. takes the price of its product as given and produces as much output as possible
c. chooses the price of its product so as to maximize the number of sales
d. can choose any price it wants, regardless of demand.
Correct Answer
a. can choose any price along the market curve
Page 1 of 30
,Question 3
The market demand curve and the demand curve faced by a monopoly are:
a. different, but we can't tell which is more elastic w/o more information
b. different in that the market demand curve is less elastic
c. different in that the market demand curve is more elastic
d. identical
Correct Answer
d. identical
Question 4
If the monopolist is operating in the elastic portion of its demand curve, then
a. an increase in price will decrease total revenues
b. an increase in price will leave total revenue unchanged
c. marginal revenue is negative
d. an increase in price will increase total revenues
Correct Answer
a. an increase in price will decrease total revenues
Page 2 of 30
, Question 5
Assume that Bost, Incorporated sells game cartridges that can be used in a popular home video system. Bost currently sells
300 cartridges per week and earns $500 in profit. Bost's production manager calculates that the marginal cost of the next
unit is $5, while marginal revenue for one additional unit is $10. Based upon this info we would conclude that:
a. Insufficient information
b. Bost should reduce their output
c. Bost's profit would rise to $505 by increasing output 1 unit
d. Bost's profit would rise to $510 by increasing output 1 unit
Correct Answer
c. Bost's profit would rise to $505 by increasing output 1 unit
Question 6
Generally, we expect monopolies to (blank) output when demand for their product rises.
Select one:
a. double
b. not change
c. decrease
d. increase
Correct Answer
d. increase
Page 3 of 30
Answers |Fall 2026/2027 Update | 100% Correct
Question 1
The marginal revenue curve of a monopolist lies below the demand curve because:
a. the marginal revenue curve coincides w/ the average revenue curve
b. the monopolist is a price taker
c. the monopolist must lower price on all units sold in order to sell additional units
d. the demand curve is unit elastic
Correct Answer
c. the monopolist must lower price on all units sold in order to sell additional units
Question 2
A monopolist:
a. can choose any price along the market curve
b. takes the price of its product as given and produces as much output as possible
c. chooses the price of its product so as to maximize the number of sales
d. can choose any price it wants, regardless of demand.
Correct Answer
a. can choose any price along the market curve
Page 1 of 30
,Question 3
The market demand curve and the demand curve faced by a monopoly are:
a. different, but we can't tell which is more elastic w/o more information
b. different in that the market demand curve is less elastic
c. different in that the market demand curve is more elastic
d. identical
Correct Answer
d. identical
Question 4
If the monopolist is operating in the elastic portion of its demand curve, then
a. an increase in price will decrease total revenues
b. an increase in price will leave total revenue unchanged
c. marginal revenue is negative
d. an increase in price will increase total revenues
Correct Answer
a. an increase in price will decrease total revenues
Page 2 of 30
, Question 5
Assume that Bost, Incorporated sells game cartridges that can be used in a popular home video system. Bost currently sells
300 cartridges per week and earns $500 in profit. Bost's production manager calculates that the marginal cost of the next
unit is $5, while marginal revenue for one additional unit is $10. Based upon this info we would conclude that:
a. Insufficient information
b. Bost should reduce their output
c. Bost's profit would rise to $505 by increasing output 1 unit
d. Bost's profit would rise to $510 by increasing output 1 unit
Correct Answer
c. Bost's profit would rise to $505 by increasing output 1 unit
Question 6
Generally, we expect monopolies to (blank) output when demand for their product rises.
Select one:
a. double
b. not change
c. decrease
d. increase
Correct Answer
d. increase
Page 3 of 30
