Microeconomics Ch.15 Quiz
When an industry is a natural monopoly?
A larger number of firms will lead to a higher average cost
A firm that is the sole seller of a product without close substitutes is
A monopolist
What is the formula for total revenue
P*Q=TR
A profit-maximizing monopoly's total revenue is equal to
P^3*Q^2
Profit formula one
Profit= Tr-Tc
What is the formula for average revenue
TR/Q=AR=P
Reduced competition through merging of companies will raise social welfare
if the benefit from the synergies exceeds the social cost of increased market power
A monopolist produces
less than the socially efficient quantity of output, but at a higher price than in a competitive market.
The simplest way for a monopoly to arise is for a single firm to?
Own a key Resource
What is the marginal revenue for selling the 8th shirt
$20
Profit formula three
(P - ATC) * Q
Profit formula two
(TR/Q - TC/Q) * Q
A monopolist can sell 200 units of output for $36.00 per unit. Alternatively, it can sell 201 units of output for $35.80 per unit. The marginal revenue of the 201st unit of output is
-$4.20
When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly
All of the above
What is the formula for marginal revenue
Change in TR/Change in Q=MR
A natural monopolist's ability to price its product is
Constrained by the market demand curve
As a monopolist increases the quantity of output it sells, the price consumers are willing to pay for the good
Decreases
Which of the following is not a reason for the existence of a monopoly
Diseconomies of scale
A monopoly market
Generally fails to maximize total economic well-being.
What is marginal revenue equal to
Marginal revenue= Marginal cost
For a monopolist, when does marginal revenue exceed average revenue?
Never
A reduction in a monopolist's fixed costs would
Not effect the profit-maximizing price and quantity , depending on the elasticity of demand.
When a monopolist increases the number of units it sells, there are two different effects on revenue. They are the
Output effect and price effect.
For a monopoly market, total surplus can be defined as the value of the good to
consumers minus the costs of producing the good.
If the monopoly operates at the output level below Q^0 then an increase in output toward Q^0 (but not so large an increase as to exceed Q^0) would
lower the price and raise total surplus.
