Assignment 11

When _____ substitutes exist, a firm in an imperfectly competitive industry has ______ power to raise price

"more"; "less"

For a monopoly, the marginal revenue curve has _____ point(s) in common with the firm's linear demand curve.

"one"

When the demand curve is a downward sloping straight line, the quantity at which the demand curve intersects the horizontal (quantity) axis is _______ the quantity at which the marginal revenue curve intersects the horizontal (quantity) axis

"twice"

Voss Calculator Company has a monopoly on the sale of graphing calculators. If it sells two of these calculators its total revenue is $600, and if it sells three calculators its total revenue is $750. The marginal revenue of the third calculator sold is...

$150

When a monopolist sells two units of output its total revenue is $150. When a monopolist sells three units of output its total revenue is $210. When the monopolist sells three units of output, the price per unit is...

$70

3 things that are NOT characteristics of a pure monopoly

1. there are no major barriers to entering the industry 2. similar products are made by other industries 3. there are only a few firms in the industry

When a firm engages in perfect price discrimination...

1. they produce the same output level as a competitive firm 2. consumer surplus is zero 3. there is no deadweight loss

In an imperfectly competitive industry...

A. a single firm has some control over the price of its output B. the gov't will always regulate the output price C. a single firm has no control over the price of its output D. a single firm will be able to sell all of its output at whatever price it wants to charge ANSWER = A

One major characteristic of pure monopoly is...

A. there are severe barriers to entering the industry B. there are only a few firms in the industry C. similar products are made by other industries D. the total amount produced by the industry is large ANSWER = A

If a perfectly competitive firm with constant returns to scale was reorganized as a monopoly, its monopoly price would be _____ the perfectly competitive price and its monopoly output would be _____ the perfectly competitive output

Greater than; less than

Question 12

Question 12

Question 15

Question 15

Question 17

Question 17

Question 18

Question 18

Question 23

Question 23

Question 26

Question 26

Question 33

Question 33

Question 35

Question 35

Question 4

Question 4

Explain why the marginal revenue curve facing a competitive firm differs from the marginal revenue curve facing a monopolist. Unlike for perfectly competitive firms, whose marginal revenue curves are the same as their individual demand curves, a monopolist's marginal revenue curve differs from its demand curve because...

a monopoly must lower the price on all units to sell one more unit of output

Which of the following is least likely to be considered a firm in an imperfectly competitive industry?

a wheat farmer in Kansas

Actions to enforce the antitrust laws are initiated

by the Antitrust Division of the Justice Dept, and the FTC, and private firms or citizens

Monopolies, oligopolies, and monopolistic competitive industries all...

have market power

A monopolist will not produce

in the inelastic portion of its demand curve, where marginal revenue is negative

Between 1890 and 1920, antitrust legislation was passed in response to the...

increasing importance of very large firms and trusts, which were groups of firms that acted like monopolists.

For a monopoly, marginal revenue...

is less than price, because a monopolist must lower its price in order to sell more

If a monopolist is protected by barriers that prevent other firms from selling the same product, then the monopolist...

is still constrained by the demand curve for its product

Question 6: Lowering the elasticity of demand and building barriers to entry will benefit Taylor Swift because...

it increases her market power and makes it possible to earn economic profits over time

For a profit maximizing monopolist...

marginal revenue is less than price

An industry with a single firm in which the entry of new firms is blocked is called...

monopoly

The demand for Ben & Jerry's ice cream will likely be _____ the demand for dessert

more price elastic than

In interpreting the Sherman Act, the Supreme Court developed the Rule of Reason, which says that a firm may be found guilty of violating the law...

only if its conduct is unreasonable

Market power refers to a firms ability to...

raise price without losing all sales of its product

Imperfect Competition...

results in less efficient market outcomes

One of the major characteristics of pure monopoly is...

there is only one firm in the industry

When the demand curve is downward sloping straight line, the slope of the marginal revenue curve is...

twice as steep as the demand curve

The _____ broadly a market is defined; the more difficult it becomes to find _______

"more" ; "substitutes"

A market where there is only one buyer for a good or service is called a monopoly

False

A monopolist maximizes profit by setting output where...

MR = MC

In 1914 Congress passed the Clayton Act and the Federal Trade Commission Act

The Clayton Act outlaws certain specific behavior, and the FTC Act prohibits "unfair methods of competition"

The term "rent seeking" refers to

any actions taken to protect positive profits

If a monopolist is at a point on its demand curve such that marginal revenue is greater than marginal cost, then it can increase profit by...

decreasing price and increasing output