Scribd
Upload
22 views3 pages

Monopoly MCQs

Uploaded by

siddharth.rathore1986
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
22 views3 pages

Monopoly MCQs

Uploaded by

siddharth.rathore1986
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

Monopoly MCQs

1)If a monopolist faces the demand curve P=200−4QP = 200 - 4QP=200−4Q and the total cost function
TC=50+16Q+Q2TC = 50 + 16Q + Q^2TC=50+16Q+Q2, what is the monopolist’s profit-maximizing output?
A) 18
B) 16
C) 20
D) 24

2)Which of the following statements is true for a monopolist practicing third-degree price
discrimination?

A) The monopolist will charge a higher price in the more elastic market.

B) The monopolist will produce where the sum of marginal revenues in each market equals marginal
cost.

C) The monopolist's total output will be the same as if it charged a single price.

D) The monopolist can achieve a higher profit by not price discriminating.

3)Consider a monopolist who charges a different price in each of two markets, A and B. The demand
functions are Qa=100−2Pa, Qb=80−Pb, and the cost function is C(Q)= 20Q. What is the monopolist’s
total profit-maximizing price in each market?

A) Pa = 30, Pb = 60
B) Pa = 25, Pb = 70
C) Pa = 40, Pb = 50
D) Pa = 35, Pb = 55

4)Which of the following is a necessary condition for successful price discrimination by a monopolist?

A) Different prices in different markets must equal marginal cost.


B) Consumers must have identical preferences.
C) The monopolist must be able to prevent or limit reselling among consumers.
D) The product must have a perfectly elastic demand curve.

5)Under price discrimination, what happens to consumer surplus?

A) It is entirely transferred to the monopolist as profit.


B) It remains unchanged.
C) It increases due to higher prices.
D) It is partially transferred to the monopolist and partially lost as deadweight loss.

6)Given the total cost function C(Q) = 100 + 20Q + Q2 and the demand curve P = 140 – 2Q, what is the
monopolist’s profit-maximizing output and price?

A) Q = 10, P = 120
B) Q = 20, P = 100
C) Q = 12, P = 116
D) Q = 18, P = 104

7)For a monopolist practicing perfect first-degree price discrimination, which of the following is true?

A) Marginal revenue is always greater than marginal cost.


B) Consumer surplus is zero.
C) Total output is less than in a competitive market.
D) There is always a deadweight loss.

8)A monopolist faces a demand curve P = 200 – 5Q and has a total cost function C(Q) = 20 + 10Q. What
is the monopolist’s profit maximizing price and output?

E) Q = 16, P = 120
F) Q = 18, P = 100
G) Q = 19, P = 105
H) Q = 15, P = 125

9)In the case of price discrimination, a monopolist will charge a higher price in the market where:

A) Demand is more elastic.


B) Demand is less elastic.
C) The product has close substitutes.
D) Production costs are lower.

10)A monopolist faces the following segmented market demand functions: Q 1 =100−2P 1 and Q 2 =80−P 2
. If the cost function is C(Q)= 20Q, what quantity should be produced in each market to maximize profit?

A) Q1 = 20, Q2 = 30
B) Q1 = 30, Q2 = 30
C) Q1 = 25, Q2 =20
D) Q1 = 30, Q2 = 10

11)Which of the following is a necessary condition for price discrimination to be effective?

A) Homogeneous products
B) Equal price elasticity of demand in all markets
C) Effective separation of sub-markets
D) Presence of perfect competition

12)Which of the following is NOT a characteristic of a monopoly market?

A) Single seller
B) No close substitutes
C) Free entry and exit
D) Price maker

13)In first-degree price discrimination, the monopolist:

A) Charges a single price to all consumers


B) Charges different prices to different consumer groups
C) Charges each consumer the maximum they are willing to pay
D) Sells at a price equal to average cost

14)What is the primary reason a monopolist engages in price discrimination?

A) To create consumer surplus


B) To maximize total revenue and profits
C) To minimize production costs
D) To comply with government regulations

15)In third-degree price discrimination, the monopolist:

A) Charges the same price in all markets


B) Charges different prices in different markets based on elasticity of demand
C) Charges different prices based on production costs
D) Sells at a price equal to marginal cost

1 – A, 2 – B, 3 – D, 4 – C, 5 – A, 6- B, 7- B, 8 – C, 9 – B, 10 – B, 11 – C, 12 – C, 13 – C, 14 – B, 15 - B

You might also like