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Managerial Economics · Monopoly pricing

BSMS3206 · 22 questions · 23.5 marks · 3 papers

Answer key

Indian Institute of Technology Madras

BS Degree Programme · Examination & Study Paper

BSMS3206 · Managerial Economics

Monopoly pricing

Official Paper

Examination Instructions & Guidelines

Solve on notebook/paper first before checking solutions.
MCQ: Exactly 1 option is correct. Negative marking applies.
NAT: Numerical response. No negative marking.
Scientific calculator allowed for all calculations.
Official answer key is sealed at the end of this sheet.

End Term · 31 Aug 2025 (FN)End Term

Read the passage below, then answer Q1–Q4
Recall the example of apartments’ market discussed in the week 1. Suppose the demand curve faced by a monopolist apartment owner who has 60 apartments is D(p) = 100−2p.
Based on the above data, answer the given subquestions.
Q1NAT1 Mark·Write the number
Asked 2 times Key ↓
What price would this monopolist will set? ____________
Your answer:
Q2NAT1 Mark·Write the number
Asked 2 times Key ↓
How many apartments will he offer for rent? _____________
Your answer:
Q3NAT1 Mark·Write the number
Asked 2 times Key ↓
What price would he set if he had 40 apartments? _____________
Your answer:
Q4NAT1 Mark·Write the number
Asked 2 times Key ↓
How many would he rent if he had 40 apartments? ______________
Your answer:
Read the passage below, then answer Q5–Q7
A monopolist can produce at a constant average (and marginal) cost of AC = MC = $5. It faces a market demand curve given by Q = 53 – P.
Based on the above data, answer the given subquestions.
Q5NAT1 Mark·Write the number
Asked 2 times Key ↓
Your answer:
Q6NAT1 Mark·Write the number
Asked 2 times Key ↓
Your answer:
Q7NAT1 Mark·Write the number
Asked 2 times Key ↓
What will be the profit of this monopolist? Profit = _____________
Your answer:
Q8MCQ1 Mark·Choose one option
Asked 3 times Key ↓
A monopolist always produces in
1. AThe inelastic region of market demand curve
2. BThe elastic region of market demand curve
3. CThe whole demand curve
4. DNone of these

End Term · 31 Aug 2025 (AN)End Term

Read the passage below, then answer Q9–Q11
Suppose a profit-maximizing monopolist is producing 800 units of output and is charging a price of ₹40 per unit.
Based on the above data, answer the given subquestions.
Q9NAT2 Marks·Write the number
Key ↓
If the price elasticity of demand for the product is –2, find the marginal cost (in ₹) of the last unit produced ____________
Your answer:
Q10NAT2 Marks·Write the number
Key ↓
What is the firm’s percentage markup of price over marginal cost (as a % of the price)? ___________
Your answer:
Q11NAT2 Marks·Write the number
Key ↓
Suppose that the average cost of the last unit produced is ₹15 and the firm’s fixed cost is ₹2000. Find the firm’s profit (in ₹)___________
Your answer:
Read the passage below, then answer Q12–Q15
Based on the above data, answer the given subquestions.
Q12NAT1 Mark·Write the number
Asked 2 times Key ↓
What price would this monopolist will set? ____________
Your answer:
Q13NAT1 Mark·Write the number
Asked 2 times Key ↓
How many apartments will he offer for rent?____________
Your answer:
Q14NAT1 Mark·Write the number
Asked 2 times Key ↓
What price would he set if he had 40 apartments? ____________
Your answer:
Q15NAT1 Mark·Write the number
Asked 2 times Key ↓
How many would he rent if he had 40 apartments?____________
Your answer:
Q16MCQ1 Mark·Choose one option
Asked 3 times Key ↓
A monopolist never produces in
1. AThe inelastic region of market demand curve
2. BThe elastic region of market demand curve
3. CThe whole demand curve
4. DNone of these

Quiz 2 · 3 Aug 2025 (AN)Quiz 2

Read the passage below, then answer Q17–Q19
A monopolist can produce at a constant average (and marginal) cost of AC = MC = $5. It faces a market demand curve given by Q = 53 – P.
Based on the above data, answer the given subquestions.
Q17NAT1 Mark·Write the number
Asked 2 times Key ↓
Calculate the profit-maximizing price (in $) for this monopolist.
Your answer:
Q18NAT1 Mark·Write the number
Asked 2 times Key ↓
Calculate the profit-maximizing quantity for this monopolist.
Your answer:
Q19NAT1 Mark·Write the number
Asked 2 times Key ↓
What will be the profit of this monopolist? Profit= ___________________
Your answer:
Q20MCQ0.5 Marks·Choose one option
Key ↓
For a profit-maximizing monopolist, price exceeds marginal revenue at the equilibrium quantity.
1. ATrue
2. BFalse
Q21MCQ0.5 Marks·Choose one option
Key ↓
A natural monopoly has a long-run marginal cost that exceeds long-run average cost.
1. ATrue
2. BFalse
Q22MCQ0.5 Marks·Choose one option
Asked 3 times Key ↓
A monopolist will never operate in the elastic portion of the demand curve.
1. ATrue
2. BFalse

Official Key

Master Answer Key & Explanations

Official answer keys from IIT Madras BS past papers. Click any question to review.

Reveal Key

Q125

Q250

Q330

Q440

Q529

Q624

Q7576

Q8B

Q920

Q1050

Q1120000

Q1225

Q1350

Q1430

Q1540

Q16A

Q1729

Q1824

Q19576

Q20A

Q21B

Q22B

Questions and answer keys are reproduced from the official IIT Madras BS papers. Topics and repeated question types are BTechi’s own grouping. BTechi is not affiliated with IIT Madras.