chapter 15
Which of the following is not an example of price discrimination?
A bakery charges a higher price for brownies than for cookies.
What price will the monopolist charge in order to maximize profit?
B
A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of output, its marginal revenue is $40, its average revenue is $80, and its average total cost is $44.
$18,000.
Based upon the information shown, what are total costs for Bearclaws, given that it maximizes profits?
$700.
A monopolist can sell 300 units of output for $50 per unit. Alternatively, it can sell 301 units of output for $49.60 per unit. The marginal revenue of the 301st unit of output is
-$70.40.
Refer to Figure 15-2. A profit-maximizing monopoly's total revenue is equal to
P5 × Q3.
Which of the following is a necessary characteristic of a monopoly?
The firm is the sole seller of its product.
Which of the following statements is not correct?
The government may break up a natural monopoly to lower the price charged to customers.
What is the area of deadweight loss?
The triangle 1/2[(X − Z) × (K − J)]
Which of the following is an example of public ownership of a monopoly?
U.S. Postal Service
The fundamental source of monopoly power is
barriers to entry.
Price discrimination
can maximize profits if the seller can prevent the resale of goods between customers.
A benefit to society of the patent and copyright laws is that those laws
encourage creative activity.
In a natural monopoly,
if the government requires marginal cost pricing, it will likely have to subsidize the firm.
For a firm to price discriminate,
it must have some market power.
A firm cannot price discriminate if
it operates in a competitive market.
In order to sell more of its product, a monopolist must
lower its price.
The deadweight loss associated with a monopoly occurs because the monopolist
produces an output level less than the socially optimal level.
A government-created monopoly arises when
the government gives a firm the exclusive right to sell some good or service.
A natural monopoly occurs when
there are economies of scale over the relevant range of output.