monopolies

$30.

A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $30, its average revenue is $60, and its average total cost is $34. . At Q = 500, the firm's marginal cost is

True

Copyrights and patents are examples of barriers to entry that give firms monopoly pricing powers.

increase if the output is between Q3 and Q4.

If the monopoly firm is currently producing Q4 units of output, then a decrease in output will necessarily cause profit to

lower its prices

In order to sell more of its product, a monopolist must

above marginal cost

Monopolies are socially inefficient because the price they charge is

above marginal cost.

Monopolies are socially inefficient because the price they charge is

the government typically has little incentive to reduce costs.

One problem with government operation of monopolies is that

increased total surplus.

Price discrimination adds to social welfare in the form of

Q1 or Q2 only.

Profit can always be increased by increasing the level of output by one unit if the monopolist is currently operating at

barriers to entry.

The fundamental source of monopoly power is

a larger number of firms will lead to a higher average total cost.

When an industry is a natural monopoly,

geographical location.

When deciding what price to charge consumers, the monopolist may choose to charge them different prices based on the customers'

MC>mr

decrease unit

mr>mc

increase unit

A,X (where MC and MR cross, with price at point of demand)

monopoly point

price floor

monopooly effecient point

Q3

profit maximizing firm will be where

B,Y (where MC crosses demand)

socially effecient point

price B quantity Y

socially effecient point

marginal revenue

the change in total revenue from an additional unit sold

marginal cost

the cost of producing one more unit of a good

Like competitive firms, monopolies choose to produce a quantity in which marginal revenue equals marginal cost.

true

Even with market power, monopolists cannot achieve any level of profit they desire because they will sell lower quantities at higher prices.

true because of law of demand

(K − B) × W

what area measures monopolist profit