Chapter 12 Pure Monopoly
Refer to the diagram. At the profit-maximizing level of output, total cost will be
0BHE.
Refer to the graphs of D and MR for a monopolist. Which of the following statements is true?
A price cut from P1 to P2 would lead to an increase in the amount of dollars consumers spend on the product.
Which of the following is correct?
A purely competitive firm is a "price taker," while a monopolist is a "price maker."
Refer to the graphs of D and MR for a monopolist. Why is the MR curve inside the demand curve for a monopolist? wrong
Monopolists do not produce where MR = MC
Refer to the graphs of D and MR for a monopolist. We know that to maximize profits the firm will set a price
above P2.
Refer to the diagram. At the profit-maximizing level of output, the firm will realize
an economic profit of ABHJ
A pure monopolist is producing an output such that ATC = $4, P = $5, MC = $2, and MR = $3. This firm is realizing
an economic profit that could be increased by producing more output.
Which of the graphs above would reflect a Monopolist in the long run? wrong
b only
Assume a pure monopolist is currently operating at a price-quantity combination on the inelastic segment of its demand curve. If the monopolist is seeking maximum profits, it should wrong
charge a higher price.
Which of the following is incorrect? Imperfectly competitive producers
do not compete with one another.
X-inefficiency refers to a situation in which a firm
fails to achieve the minimum average total costs attainable at each level of output.
Why is a Monoploist unable to charge whatever price it wants? wrong
it faces a downsloping demand curve.
In the long run, a pure monopolist will maximize profits by producing that output at which marginal cost is equal to
marginal revenue.
Network effects and simultaneous consumption tend to foster the development of
monoploy power
The supply curve for a monopolist is
nonexistent
Pure monopolists may obtain economic profits in the long run because
of barriers to entry.
Refer to the long-run cost diagram for a firm. If the firm produces output Q 2 at an average cost of ATC 3, then the firm is
producing that output with the most efficient combination of inputs and is realizing all existing economies of scale.
In which one of the following market models is X-inefficiency least likely to be present?
pure competition
If a monopolist were to produce in the inelastic segment of its demand curve,
the firm would not be maximizing profits.
Price discrimination refers to
the selling of a given product to different customers at different prices that do not reflect cost differences.
