ch 12 tut

Refer to Figure 13.2.2. If the single-price monopoly shown in Figure 13.2.2 is maximizing profit, what is total economic profit?

$6

Refer to Figure 13.2.1. This single-price monopoly produces ________ units per day and charges a price of $________ per unit.

20; 75

Refer to Figure 13.4.2. Assume this monopolist practises perfect price discrimination. How many tickets are sold?

60 tickets

Consider the natural monopoly depicted in Figure 13.5.2. What area in the graph represents the deadweight loss arising from an average cost pricing rule?

DEF

Consider the revenue and cost curves in Figure 13.3.3. If this is a single-price monopoly, what is consumer surplus?

KEA

Consider the natural monopoly depicted in Figure 13.5.2. If a regulatory agency sets a price just sufficient for the firm to make zero economic profit, what output will it produce?

Q2

Consider the natural monopoly depicted in Figure 13.5.2. If a regulator uses a marginal cost pricing rule to set price, what is the quantity produced?

Q3

Consider Figure 13.3.2. Consider a perfectly competitive market. If the light grey area shows the consumer surplus, and the dark grey area shows the producer surplus, which graph correctly represents this market?

a

Which of the following markets will have the largest deadweight loss

a single-price monopoly

A monopoly arises for two key reasons, which are

barriers to entry and no close substitutes

A monopoly can practise price discrimination when it

can segment the market according to the different prices the consumers are willing to pay.

In a natural monopoly, the long-run average cost curve

is downward sloping in the relevant range of output levels.

The pursuit of wealth by capturing economic rent

is rent seeking

Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2 per inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals a monopoly for its new inhaler. If Prime Pharmaceuticals can perfectly price discriminate, then it

sells 16 million inhalers

Which of the following is least likely to be a natural monopoly?

taxicab service