Econ 22,23,24

A monopolist

may be able to charge different people different prices or different unit prices for successive units sought by a given buyer.

Quantity for monopoly is [>,<,=] quantity for competitor

<

At​ long-run equilibrium for a perfectly competitive​ firm, price equals marginal revenue equals marginal cost equals average cost.

True

Compared to a perfect​ competitor, a monopolist will charge a​ ________ price and produce a​ ________ quantity.

higher; smaller

In the LONG RUN, a perfectly competitive firm produces to the point at which​ price, marginal​ revenue, marginal​ cost, short-run minimum average​ cost, and​ long-run minimum average cost are all ______

Equal

Along the​ long-run industry supply​ curve, firms in the industry earn zero accounting profits.

False

Consumer surplus is the sum of the total amount that consumers would have been willing to pay and the total amount that they actually​ pay, given the market clearing price that prevails in the perfectly competitive market.

False

The​ long-run average cost curve is also called the marginal cost curve.

False

Monopoly tends to result in a _____________ quantity being​ sold, because the price is _____________ than it would be in an ideal perfectly competitive industry in which the cost curves were essentially the same as the​ monopolist's.

Lower;higher

Perfectly competitive pricing is essentially _________ pricing.​ Therefore, the perfectly competitive solution is called efficient because _________ represents the social opportunity cost of producing one more unit of the good.

Marginal Cost

Because a monopolist produces a smaller quantity and charges a higher price than it would as a perfect​ competitor, a portion of the consumer surplus experienced under perfect competition becomes deadweight loss.

True

Because a monopolist produces a smaller quantity and charges a higher price than it would as a perfect​ competitor, total consumer surplus under a monopoly is less than it is under perfect competition.

True

Because a monopolist produces output at a point where price is greater than marginal​ cost, underproduction occurs

True

Economies of scale refer to what happens to average cost when all factors of production are increased.

True

If too many or too few resources are used in the production of a​ good, this is referred to as market failure.

True

In choosing the appropriate plant size for a​ single-plant firm during the long​ run, the firm will pick the size whose​ short-run average cost curve generates an average cost that is lowest for the expected rate of output.

True

In the long​ run, capital will flow into industries in which profitability is highest and will flow out of industries in which profitability is lowest.

True

The firm can experience economies of​ scale, diseconomies of​ scale, or constant returns to​ scale, all according to whether the​ long-run average cost curve slopes downward, slopes upward, or is horizontal, respectively.

True

The firm may experience diseconomies of scale primarily because of limits to the efficient functioning of management.

True

The long run is often called the planning horizon

True

The minimum efficient scale occurs at the lowest rate of output at which​ long-run average costs are minimized

True

The​ long-run average cost curve is horizontal.

True

We observe economies of scale for a number of​ reasons, including​ specialization, improved productive​ equipment, and the dimensional ​factor, because​ large-scale firms require proportionately less input per unit of output.

True

Market failure occurs when

an unrestrained market allocates too many or too few resources to a specific economic activity.

A monopoly is socially inefficient because it

charges a price greater than marginal cost.

Price discrimination is

charging different prices to different people or for different units when there are no differences in costs of production.

Provided that monopolization of a previously perfectly competitive market does not affect that​ market's __________ ​structure, the price that consumers pay for the​ monopolist's product is _______ than the marginal cost of producing that item.

cost;greater

If a​ firm's long-run average costs increase as its output​ increases, the firm is experiencing

diseconomies of scale

In a​ decreasing-cost industry, the​ long-run supply curve is

downward sloping.

Firms in a competitive industry can

enter or leave the industry without serious impediment.

A​ constant-cost industry has a ________ ​long-run supply curve. An​ increasing-cost industry has an ______________ -sloping ​long-run supply curve. A​ decreasing-cost industry has a _________ -sloping ​long-run supply curve.

horizontal;upward;downward

Charging different prices to different people or for different units to reflect differences in costs of production

is price differentiation.

As compared to a perfectly competitive​ industry, a monopoly industry with identical cost curves will

produce less and set a higher price.

When a competitive firm sells its product at a price equal to marginal​ cost,

society enjoys an efficient allocation of productive resources.

In order to engage in price​ discrimination, a firm must have

some monopoly power.

Economic efficiency means that

total output of society cannot be increased without lowering the value of the total output produced in the economy.

It is found by drawing a curve tangent to points on a series of short-run average cost​ curves, each corresponding to a different plant size.

true

the long run average cost curve is the planning curve

true

In the long​ run, perfectly competitive firms make ________ economic profits because of entry and exit whenever there are industrywide economic profits or losses.

zero

Minimum efficient scale refers to the​ ________ rate of output per unit time at which​ long-run average costs for a particular firm are at a​ ________.

​lowest; minimum