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4.2 Monopoly MCQ Open Practice
By Michael Burbine
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Last updated 4 months ago
10 questions
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Question 1
1.
Which of the following is a characteristic of a monopoly?
Numerous sellers
Single seller
Free entry and exit
Homogeneous products
Perfect information
Question 2
2.
Why do monopolies have high barriers to entry?
They own key resources
They produce homogeneous products
Government regulation
Less advertising
None of the above
Question 3
3.
When marginal cost is greater than average cost
When marginal cost equals average cost
When average cost is constant
At the production of goods at full capacity
When average cost equals zero
Question 4
4.
How does a monopolist maximize profit?
By setting marginal revenue equal to marginal cost
By maximizing total revenue
By minimizing cost
By increasing production indefinitely
By maximizing consumer satisfaction
Question 5
5.
What causes deadweight loss in a monopoly?
The monopolist setting price above marginal cost
Equal pricing for all products
Government intervention
Zero barriers to entry
Perfect competition
Question 6
6.
What happens to consumer surplus in a monopoly?
It decreases as prices rise above competitive levels
It remains unchanged
It increases as output increases
It becomes negative
It is maximized
Question 7
7.
What is likely to happen to efficiency in a monopoly?
Productive efficiency is improved
Competition leads to pricing strategies
Allocative inefficiency occurs
All resources are used effectively
None of these are correct.
Question 8
8.
How do monopolies affect prices compared to perfect competition?
Prices fluctuate frequently
Prices remain constant over time
Higher prices than in perfect competition
Lower prices than in perfect competition
None of these are correct.
Question 9
9.
If a monopolist's total cost curve is TC = 100 + 4Q and the demand is P = 20 - Q, what is the profit-maximizing quantity?
5
8
10
6
12
Question 10
10.
Given the same cost and demand functions, what is the monopolist’s profit at the profit-maximizing level?
$48
$60
$100
$40
$72