Microeconomics Ch 12

X-inefficiency is said to occur when a firm's

Average costs of producing any output are greater than the minimum possible average costs

If a monopolist produces 100 units of output at a market price of $5 per unit with marginal revenue per unit equaling $4, we would expect that if the monopolist's good was provided under pure competition, quantity would be:

Higher than 100 units, price lower than $5, and MR = price

Suppose that a monopolist calculates that at present output and sales levels, marginal revenue is $1.00 and marginal cost is $2.00. He or she could maximize profits or minimize losses by:

Increasing price and decreasing output

In moving down the elastic segment of the monopolist's demand curve, total revenue is:

Increasing, and marginal revenue is positive

Allocative inefficiency due to unregulated monopoly is characterized by the condition:

P>MC

Which of the following is not a barrier to entry? Patents X-inefficiency ownership of essential resources economies of scale

X-inefficiency

A pure monopolist should never produce in the:

inelastic segment of its demand curve because it can increase total revenue and reduce total cost by increasing price.

Many people believe that monopolies charge any price they want to without affecting sales. Instead, the output level for a profit-maximizing monopoly is determined by:

marginal cost = marginal revenue

Other things equal, a price discriminating monopolist will:

produce a larger output than a nondiscriminating monopolist.

Price discrimination refers to:

the selling of a given product at different prices that do not reflect cost differences.