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