chapter 12 econ

price greater

Pure monopolists: Operate where ___ is ___ then MC

Licenses

In many large U.S. cities, taxicab companies operate as near monopolies because of:

false

A monopolist, being the sole seller in a market, is assured of positive economic profits. true or false

ATC

A monopoly results in productive inefficiency because at the profit-maximizing output level: _______ is not at its minimum level

False

A patent for a new product or a new business process is typically granted for a hundred years. true or false

consumer loyalty

Google gained its monopoly power in the market for internet-search service because it: Was first to market and gained ______ _____

elastic x y

If a price-discriminating monopolist sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that demand is: Less ____ in market _ than market _

Wham-O

The classic example of a private unregulated monopoly is: (Frisbee)

lower rates

example of price discrimination A telephone company charging ___ ____ to weekend users than weekday users

elastic

Refer to the above graphs of D and MR for a monopolist. Which of the following statements is true? Demand is _______ at a price of P1

elasticities

To practice long-run price discrimination, a monopolist must: Be able to separate buyers into different markets with different price _______

true

In a monopoly at equilibrium, price is greater than marginal cost. true or false

Decreasing output

Suppose that a monopolist calculates that at its present output level, marginal cost is $4.00 and marginal revenue is $5.00. The firm could increase profits by: ______ price and increasing _________

False

At the inelastic portion of a monopolist's demand curve, the marginal revenue of each extra unit of output is positive. true or false

Increasing decreasing

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

loss DE

Refer to the above graph for a monopolist in short-run equilibrium. This monopolist: Has a _____ per unit equal to _____

Positive

Refer to the above graph for a profit-maximizing monopolist. At equilibrium, the firm will be earning: _______ profits

variable cost

A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than: Average ______ _____

Rent-seeking

Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures as:

greater

One argument for having the government regulate natural monopolies is that without regulation: These monopolies produce at a level where marginal benefit is ______ than marginal cost

monopolists

Pure _____ do not always realize positive profits, sometimes they suffer losses

0ADQ

Refer to the above graph for a monopolist in short-run equilibrium. This monopolist has total cost equal to area:

optimal price allocative

What is the meaning of the phrase "dilemma of regulation"? The socially ____ _____ achieves _______ efficiency, but may produce economic losses; the fair return price yields a normal profit but may not be allocatively efficient

average cost cost

With non-rivalrous consumption such as in the case of online music and movies, as more consumers buy the product: The _____ ____ of the output declines because the marginal _____ is very small

Patent

An exclusive legal right as sole producer for 20 years granted to an inventor of a product is called a:

one

Assume that a monopolist faces a linear demand curve and that it produces the output quantity where total revenue is maximized. At that output, the price elasticity of demand for the product is: Equal to ______

elastic demand

Assume that a monopolist faces a linear demand curve. If the firm is operating at an output level where marginal revenue is positive, the firm: Is operating on the ______ portion of its ______ curve

profit

At equilibrium, the profit-maximizing monopolist facing the situation shown in the graph will face a negative:

p3

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a non-discriminating monopolist.

false

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a non-discriminating monopolist. true or false

positive zero

In the short run equilibrium, a monopolist's profits: May be ______ , negative, or _____

maximizing

Many economists agree that government should deal with monopolists on a case-by-case basis. Policy options include the following, except: If the monopoly is _______ economic profits, the government should subsidize new firms to enter the industry

sheltered

Monopoly firms are ________ from competitive forces and such an environment makes them subject to X-inefficiency

Monopoly

Network effects and simultaneous consumption tend to foster the development of: _________ power

essential

One major barrier to entry under pure monopoly arises from: Ownership of ______ resources

0B

Refer to the above graph for a monopolist in short-run equilibrium. This monopolist will charge a price:

0V

Refer to the above graph for a profit-maximizing monopolist. The firm will produce the quantity:

rising

Refer to the above graph. The profit-maximizing firm will produce in that output level where total revenue is:

government

Barriers to entry: Can result from _______ regulation

P3 and Q2

Refer to the above graph for a pure monopoly. If the government regulated the monopoly and made the firm set a fair-return price, what price and quantity levels would we observe in the short run?

Downsloping

The following graph shows a total revenue curve for a monopolist. Refer to the above graph. The firm's marginal revenue curve must be:

< ATC

The problem with socially-optimal pricing regulation of a natural monopoly is that: P _ ____

Less price

When compared with the purely competitive industry with identical costs of production, a monopolist will produce: ______ output and charge a higher ______

greater

Refer to the above graph showing a linear demand curve for a monopolist. Which of the following statements is correct? The area 0QVS is ______ than the area 0RWT

The firm will charge the highest price possible

Which of the following does not necessarily apply to a pure monopoly? The product the firm produces must have no close substitutes The firm must be the sole producer of a product The firm will charge the highest price possible Entry must be blocked

b

Which of the above shows the correct relationship between demand and marginal revenue?

lower prices

best represents a case of price discrimination A major airline sells tickets to senior citizens at ___ ____ than to other passengers

profit-maximizing

Refer to the above graph for a pure monopoly. If the government regulated the monopoly and made it charge the socially optimal price, this price would be: Lower than both the fair-return price and the ______ - ______ price

P2 Q3

Refer to the above graph for a pure monopoly. If the government regulated the monopoly and made it produce the level of output that would achieve allocative efficiency, what price and quantity levels would we observe in the short run? ___ and ____

90

Refer to the graph above for an industry. If the industry operates as a pure monopoly, the output quantity would be:

14

Refer to the graph above for an industry. If the industry were purely competitive, the market price would be:

Inelastic

The following graph shows a total revenue curve for a monopolist. Refer to the above graph. When total revenue declines as output expands, demand is:

$250

The following question is based on the demand and cost data for a pure monopolist given in the table below. Refer to the above table for a monopolist. A non-discriminating monopolist would earn maximum profits of:

150

The following question is based on the demand and cost data for a pure monopolist given in the table below. Refer to the above table. If the monopolist were forced to produce the socially optimal output through the imposition of a ceiling price, the ceiling price would have to be set at: $_____

$400

The following question is based on the demand and cost data for a pure monopolist given in the table below. Refer to the above table for a monopolist. If the monopolist perfectly price-discriminated and sold each unit of the product at the maximum price the buyer of that unit would be willing to pay, and if the monopolist sold 4 units, then total profits would be:

false

The supply curve for a monopolist is the upward-sloping portion of the marginal cost curve that lies above the average variable cost curve. true or false

Not clearly defined

The supply curve for a monopoly is:

30

The table shows the demand schedule facing Nina, a monopolist selling baskets. Refer to the above table for Nina. What is the change in total revenue if she lowers the price from $20 to $18?

marginal cost greater

Under which of the following conditions would a profit-maximizing monopolist necessarily raise price? If ____ ____ was _______ than marginal revenue