ch. 13 hw and modules
Price discrimination increases a monopoly's economic profit by _______.
capturing consumer surplus
A single-price monopoly is inefficient because ______ at the quantity produced.
marginal social benefit exceeds marginal social cost
In which of the following market structures is the firm's demand curve the same as the market demand for the product?
monopoly
A single-price monopoly is a firm that ______ each unit of its output ______.
must sell; for the same price to all its customers
The amount of consumer surplus that is transferred from the consumer to the monopoly equals _______.
the monopoly price minus the competitive price all multiplied by the monopoly quantity
Price discrimination is _______.
the practice of selling different units of a good or service for different prices according to the consumers' willingness to pay -alcholol companies, not just monoplies
A perfect price discriminating monopoly produces _______.
the same quantity of output as a perfectly competitive market
A price-discriminating monopoly _______.
A price-discriminating monopoly _______.
A single-price monopoly _
A single-price monopoly faces a market constraint: To sell a larger quantity, the monopoly must set a lower price.
monopolys can make long run profit because
Barriers to entry prevent the monopoly firm from facing competition. The monopoly chooses the profit-maximizing price and quantity to produce, and with no competition the monopoly can make positive economic profit in the short run and in the long run.
Which of the following is an example of a price-discrimination?
IMAX charges $6 per movie ticket for children younger than 8, and $8.50 per movie ticket for adults.
A monopoly _______.
If a monopoly produces an output in the inelastic range of the market demand, it can increase total revenue by producing a smaller output. Total cost decreases when a smaller output is produced. So economic profit, which equals total revenue minus total cost increases.
In the short run, the firm should:
Operate if price > average variable cost.
When a monopoly that produces a service practices perfect price discrimination, _______.
consumer surplus is zero -Perfect price discrimination occurs if a firm is able to sell each unit of output for the highest price anyone is willing to pay for it. In such a case, the entire consumer surplus is eliminated and captured by the producer.
A natural monopoly is a market in which _______. A legal monopoly is a market in which _______.
economies of scale enable one firm to supply the entire market at the lowest possible cost; competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright
Rent seeking is the lobbying for special treatment from the _____ to _____ or to divert consumer surplus or producer surplus away from others.
government; create economic profit
Monopoly is a market in which one firm sells a good or service that has _____ substitutes and _____ blocks the entry of new firms.
no close; a barrier
How does a single-price monopoly determine the price it will charge its customers? A single-price monopoly _______.
produces the quantity at which marginal revenue equals marginal cost and charges the highest price consumers will pay for that quantity from the demand curve
A monopoly transfers consumer surplus to itself by _______.
raising the price compared to the perfectly competitive price
Any _____ - is called economic rent.
surplus - consumer surplus, producer surplus, or economic profit
