Chapter 12 pure monopoly
price discrimination forms are
-charging different customer different price -charging each customer the maximum price he or she willing to pay -charging each customer one price for the first unite and lower price for consequent unite
in context of total revenue elastic
a decline a price will increase total revenue
in context of total revenue inelastic
a decline a price will reduce total revenue
which allows natural monopoly to produce efficiently
a decline long run average total cost curve extensive economic scale
all else equal, which is more likely to experience economic profit in the long run
a pure monopolist
The absence of any effective entry barriers
a very large number of firms, which provide the basic of pure competitions.
the main characteristic of pure monopoly
blocked entry for other firms unavailability close substitute of its products presence of single seller considerable control over the price
price discrimination high fares
business travelers whose demand for travel inelastic
monopolist use economic of scale to block to entry new firms in the industry
by lowering price so that another firm cannot compete developing innovative technology that make it difficult another firm compete
imperfect competitor by changing market supply
can influence product price
which of following describes what no close substitute means as it related to consumers and pure monopoly
consumers must either buy monopolized product or do without it entirely
efficiency loss is also know
deadweight loss
The key difference between pure monopolists and purely competitive seller lies on the
demand side of the market
computer operating software, commercial aircraft and basic steel are examples of industries which
economic of scale limit the enter of new firms
a natural monopoly may occur only a single firm can achieve
economic of scale necessary to compete in an industry
which term to used to describe declining average total cost with added firms size
economic scale
which of the following are necessary to determine the profit-maximizing and lose maximizing level output, profit-maximizing and lose maximizing price, economic profit or loss in pure monopoly
employ profit-maximizing and lose maximizing rule MR=MC identify the profit-maximizing and lose maximizing price and output by finding the price/ output combination at MR=MC
most regulatory agencies in the United stated
establish an fair-return-price that utility company is allowed to earn
network effect exists
if the value of product to each user increases as the total number of users increase
monopoly can
increase profit by charging different prices to different buyers
monopolist my create entry barrier when confronted with a entrant into the industry by
incurring advertising cost reducing product price
total economic profit
is found by multiplying per-unite profit by profit-maximizing output
whereas pure monopolist's demand curve
is market demand curve and is down-sloping
efficient loss
is occur when the sum of consumers surplus and producer surplus is less then the maximum
a near monopoly
is single firm that has bulk of sales in specific market
price discriminiation or charging different price to different customers
is widely practiced in US economy
monopolists doesn't have supply curve because
it doesn't equate the price to marginal cost there is no single, unique price associated with each level of output
government licensing is
legal barrier to entry
which of following is characteristic of public utilities
monopoly or virtually so governments owned or regulated
which of following are example that may be found x-inefficiency in regulated firms
more managers and staff then necessary nicer-than typical office building higher then competitive wages
condition necessary for price discrimination are
no reselling , market segregation monopoly power
Weaker barriers to enter
oligopoly, market structure dominated by a few firms
which of the following is consider barrier to entry into industry
ownership of essential property
the exclusive right of an inventor to use or to allow another to use,her or his invention is called
patent
government creates legal barriers to entry
patents and licenses
two legal barriers to entry are
patents and licenses
the spread or difference that result when price exceeds average total cost determines
per-unite economic profit
practice for charging different prices from different buyers for specific product is known
price discrimination
firms with down-sloping product demand curve is know
price makers
which of the following are potential to economic losses incurred by regulated monopoly caused by socially optimal pricing
public subsidies price discrimination
purely competitive
seller faces perfectly elastic demand curve at the price determined by market supply and demand
the profit-maximizing monopolist will always want to avoid which segment of its demand curve
the inelastic segment
Which of the following are reason that monopolist considered price maker
the monopolist controls the total quantity supply the monopolist exerts control over the price
monopolists used marginal revenue equal marginal cost rule to determine
the profit-maximizing output and price
the pure monopolist has no supply curve because
there is no relationship between price and quantity, and monopolists doesn't equate marginal cost to price, it is possible for different demand condition to bring about different price for the same output
marginal revenue is the change
total revenue
pure monopolist
total revenue increase at diminishing rate
when marginal revenue is positive
total revenue is increasing
how much will profit seeking produce if producing is preferable to shutdown
up to the output which marginal revenue equals marginal cost
price discrimination lower,highly restricted, nonrefundable fares
vacationers and others whose demand are more elastic
natural monopoly is called
when market demand curve crosses the long run average total cost where average total cost declining
pure monopoly exists
when single firm is solo producer of product which there are no close substitution