This graph shows the cost and revenue curves faced by a monopoly. 
According to the graph shown, the profit being earned by this monopolist is:
A. (P3 - P0)/Q1
B. (P3 - P0) ×Q1
C. (P1 - P0) × Q1
D. (P3 - P1) × Q1
Answer: B
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With perfect price discrimination, the level of output
A) exceeds the efficient quantity. B) is the same as the amount produced by any monopoly that price discriminates. C) is the same as the amount produced in a perfectly competitive market. D) equals the amount produced by a single-price monopoly. E) is unknown.
The existence of economies of scale can create ________
A) a natural monopoly B) a government monopoly C) a legal monopoly D) a market in which many firms make identical products
One reason why it is very difficult to write optimal military procurement contracts is because _____
a. there are numerous possible producers b. the military purchases many goods c. new technology often has to be developed d. there are many possible consumers of the product
An increase in foreign demand for U.S. exports will ____ the demand for U.S. dollars and cause the U.S. dollar to ____ in value
a. increase; appreciate b. increase; depreciate c. decrease; appreciate d. decrease; depreciate