LC13: LearningCurve - Ch. 13: Monopoly

If the De Beers diamond monopoly lowers the price of a diamond from $800 to $750 and sales increase from four to five diamonds, the marginal revenue of the fifth diamond is $_____.

$750 - $200 = 550

The table shows the demand curve for barrels of springwater sold by James. Water Monopoly Price per barrel | Number of barrels $16 | 0 15 | 1 14 | 2 13 | 3 12 | 4 11 | 5 10 | 6 9 | 7 8 | 8 7 | 9 6 | 10 If James's marginal and average total costs are $8, and his firm is in a perfectly competitive industry, James's maximum profit in the long run is $_____.

0

The graph shows the revenue curves and cost curves for a monopoly. At the profit-maximizing output, total cost is in the area:

0ECD.

Based on the following graph, when the market is a monopoly, _____ products are sold than would be sold in the perfectly competitive outcome.

1,000 less

The table shows the demand curve for barrels of spring water sold by James, a monopolist. Water Monopoly Price per barrel | Number of barrels $16 | 0 15 | 1 14 | 2 13 | 3 12 | 4 11 | 5 10 | 6 9 | 7 8 | 8 7 | 9 6 | 10 If James lowers his price from $11 to $10, the quantity effect is $_____.

10

The graph shows the demand, marginal revenue, and cost schedules for barrels of springwater sold by James. If James's firm is a monopoly, consumer surplus is $_____.

2 * 4 = 8

The table shows the demand curve for barrels of springwater sold by James, a monopolist. Water Monopoly Price per barrel | Number of barrels $16 | 0 15 | 1 14 | 2 13 | 3 12 | 4 11 | 5 10 | 6 9 | 7 8 | 8 7 | 9 6 | 10 If James's marginal and average total costs are $10, James will maximize profit by producing an output of _____ barrels.

3

The table shows the demand curve for barrels of springwater sold by James, a monopolist. Water Monopoly Price per barrel | Number of barrels $16 | 0 15 | 1 14 | 2 13 | 3 12 | 4 11 | 5 10 | 6 9 | 7 8 | 8 7 | 9 6 | 10 If James's marginal and average total cost is $8, total revenue at the profit-maximizing output is _____.

48

Given the graph, if the industry is a perfectly competitive, consumer surplus is the area:

A + B + D.

Given the graph, if the market is a monopoly, the monopolist's profit is the area:

B.

The graph shows the revenue curves and cost curves for a monopoly. The profit-maximizing price is:

G.

All of the following present challenges to policy makers who want to limit the market power arising from network externalities EXCEPT which one?

Policy interference in the market can easily lead to a natural monopoly.

Compared with a perfectly competitive industry, a monopolist produces _____.

a smaller quantity

When an airline charges a lower price to those who purchase far in advance of their trip, it is implementing:

an advance-purchase restriction.

The graph shows the revenue curves and cost curves for a monopoly. If the monopolist perfectly price discriminates:

consumer surplus will be zero.

Which of the following is an example of an identical good?

copper

If the De Beers diamond monopoly lowers the price of a diamond from $800 to $750 and sales increase from four to five diamonds, the price effect is a(n):

decrease in total revenue of $200.

Goods that are different but considered somewhat substitutable by consumers are called _____ goods.

differentiated

The graph shows the revenues and costs for a natural monopoly. The fact that it is a natural monopoly is revealed by the:

downward-sloping average total cost curve.

Compared with a single-price monopolist, price discrimination generally _____ efficiency.

increases

When a monopolist practices price discrimination, the monopolist:

increases profits by capturing consumer surplus.

If the De Beers diamond monopoly lowers the price of a diamond from $800 to $750 and sales increase from four to five diamonds, the marginal revenue of the fifth diamond is:

less than $750.

An insurance company that is the only company selling mandatory health insurance in a state is an example of which market structure?

monopoly

A pharmaceutical company with a patent is an example of a:

monopoly protected by a government-created barrier.

If a monopolist practices price discrimination, it will sell _____ units and _____ its profits.

more; increase

A _____ occurs when the value of a software package increases to an individual when there are more people using that same software package.

network externality

Monopoly describes a market structure in which there is/are _____ producer(s) and the product(s) is/are _____.

one; undifferentiated

The tuna fishing industry is an example of which market structure?

perfect competition

The government generally _____ policy.

prevents monopolies by using antitrust

Which of the following is NOT a form of price discrimination?

single pricing

A _____ monopolist offers its product to all consumers at the same price.

single-price

A patent on a new type of electric motor would give the inventor a:

temporary monopoly.

In order to practice perfect price discrimination, a seller will charge each consumer:

the maximum the consumer is willing to pay.