eco302 test 3 multiple choice

Suppose a firm has market power and faces a downard sloping demand curve for its product, and its marginal cost cure is upward sloping. If the firm reduces its price, then

CS increases, PS may increase or decrease

use the two following statements to answer this question: I. for a monopolist, at every output level, average revenue is equal to price II.for a monopolist, at every output level, marginal revenue is equal to price

I is true, II is false

in the bertrand model with homogenous products

all of the above: -the firm that sets the lower price will capture all of he market -the nash equilibrium is the competitive outcome -both firms set price equal to marginal cost

in which oligopoly model do firms earn zero profit

bertrand

which oligopoly models have the same results as the competitive model

bertrand

third degree PD involves

charging different prices o different groups based upon differences in elasticity of demand

in the cournot duopoly model

each firm assums that the output level of its rival is fixed

When a firm charges each customer the maximum price that the customer is willing to pay, the firm

engages in 1st degree price discrimination

assume that a profit maximizing monopolist is producing a quantity such that marginal revenue exceeds marginal cost. We can conclude that:

firm's output is smaller than the profit maximizing quantity

one difference between cournot and stackelberg

in C both firms make output decisions simultaneously and in S one firms sets it first

which of the following is not true regarding monopoly?

monopolist can charge as high a price as it likes

to find the profit maximizing level of output, a firm finds the output level where

none of the above

the market structure in which strategic considerations are most important is

oligopoly

If a monopolist sets her output such that MR, MC, and ATC are equal, economic profit must be

positive

Block pricing is an example of

second degree price discrimination

which of the following is true in S

the first firm produces more than its rival

Suppose your firm has a monopoly on a drug. If E = -4, what markup should your firmuse to set the profit maximizing price for the product?

the price cost markup is 25% of the price

the monopolist has no supply curve because

the quantity supplied at any particular prie depends on the monopolist's demand curve

in the s model, there is an advantage

to being to first competitor to commit to an output level

Suppose that the competitive market for rice in Japan was suddenly monopolized. The effect of such a change would be:

to decrease the consumer surplus of Japanese rice consumers

Bancroft Pharmaceuticals has a patent on a new medication used to treat high blood pressure, so they have a monopoly on this product. The MC of producing one dose is $10 and E = -3. What is the profit maximizing monopoly price for this patented drug product?

$15

Assume that a firm's MC is $10 and E = -2. We can conclude that the firm's profit maximizing price is approximately ___

$20

What is the value of the Lerner Index under perfect competition?

0

What is the maximum value of the Lerner Index

1

If high school students show their ID at check out they get a discount

3rd degree

florida resident discounts at disnet

3rd degree

wealthy patients are charged more than poorer ones

3rd degree

a tennis pro charges 15 per hour for kids and 30 per hour for adults

3rd degree price discrimination