Econ 3

Monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized, mutually beneficial trades are

a deadweight loss to society

L Shape curve is in monopoly represents

a natural monopoly

If a competitive firm is currently producing a level of output at which marginal cost exceeds marginal revenue, then

a one-unit decrease in output will increase the firm's profit.

Which of the following is not a characteristic of a monopoly?

free entry and exit

In the long run, a firm that produces and sells textbooks gets to choose

how many workers to hire. the size of its factories. which short-run average-total-cost curve to use. d. All of the above are correct.

MR=MC

marginal revenue=marginal costs

competitive market

A competitive market is when there are many producers competing to provide consumers with the goods and services needed

Which of the following is not a characteristic of a competitive market?

Entry is limited

Suppose that for a particular business there are no implicit costs. Then

accounting profit will be the same as economic profit.

marg prod when someone is hired

add the previous outputs of the section it applies to

If all firms have the same costs of production, then in long-run equilibrium,

all firms have zero economic profits and just cover their opportunity costs.

Profit-maximizing firms enter a competitive market when existing firms in that market have

average total costs less than market price.

Mrs. Smith operates a business in a competitive market. The current market price is $8.50. At her profit-maximizing level of production, the average variable cost is $8.00, and the average total cost is $8.25. Mrs. Smith should

continue to operate in both the short run and long run.

Tom produces commemorative t-shirts in a competitive market. If Tom decides to decrease his output, this will

decrease his revenue, since his output has decreased and the price remains the same.

When a monopolist increases the amount of output that it produces and sells, the price of its output

decreases.

One method used to control the ability of firms to capture monopoly profit in the United States is through

enforcement of antitrust laws.

implicit costs

input costs that do not require an outlay of money by the firm

explicit costs

input costs that require an outlay of money by the firm

average total cost

is defined as the sum of all production costs divided by the quantity of output produced

marginal revenue

is the additional revenue that will be generated by increasing product sales by one unit

Marginal product

is the change in output resulting from employing one more unit of a particular input

Suppose a firm has a monopoly on the sale of widgets and faces a downward-sloping demand curve. When selling the 100th widget, the firm will always receive

less marginal revenue on the 100th widget than it received on the 99th widget.

For a monopolist, marginal revenue is

less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.

Economies of scale occur when a firm's

long-run average total costs are decreasing as output increases

Suppose a monopolist is able to charge each customer a price equal to that customer's willingness-to-pay for the product. Then the monopolist is engaging in

perfect price discrimination

In the short run, a firm operating in a competitive industry will produce the quantity of output where price equals marginal cost as long as the

price is greater than average variable cost.

Price discrimination requires the firm to

separate customers according to their willingnesses to pay

how to find marginal prod of a worker

subtract the two outputs biggest first

marginal cost

the cost of producing one more unit of a good

opportunity cost

the loss of potential gain from other alternatives when one alternative is chosen.

MR curve for monopoly

the lower curve

In a perfectly competitive market, the horizontal sum of all the individual firms' supply curves is

the market supply curve.