ECON CH11-ch15

Refer to Scenario 15-1. At Q = 500, the firm's profit is

$13,000.

Refer to Scenario 15-2. What is Vincent's total revenue on a typical day?

$2,170

Refer to Scenario 15-1. At Q = 500, the firm's marginal cost is

$30.

Refer to Figure 15-4. What area measures the monopolist's profit?

(K − B) × W

Refer to Scenario 15-1. At Q = 500, the firm's total revenue is

***$17,000.

Refer to Scenario 15-2. What is Vincent's profit on a typical day?

***$2,170

Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit-maximizing monopolist to take advantage of

***diseconomies of scale.

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

***produce a lower quantity of output than is socially optimal.

Which of the following is not one of the ways that antitrust laws promote competition?

Antitrust laws allow the government to shut down a firm if the government believes the firm has monopoly power.

Refer to Figure 15-4. What price will the monopolist charge in order to maximize profit?

K

Refer to Figure 15-1. The shape of the average total cost curve reveals information about the nature of the barrier to entry that might exist in a monopoly market. Which of the following monopoly types best coincides with the figure?

Natural monopoly

Refer to Figure 15-6. What is the socially efficient price and quantity?

Price = B; quantity = Y

Which of the following is a necessary characteristic of a monopoly?

The firm is the sole seller of its product.

Refer to Figure 15-6. What is the area of deadweight loss?

The triangle 1/2[(A − C) × (Y − X)]

Refer to Figure 15-4. How much output will the monopolist produce in order to maximize profit?

W

The fundamental source of monopoly power is

barriers to entry.

A monopoly can earn positive profits because it

can maintain a price such that total revenues will exceed total costs.

Reduced competition through merging of companies will raise social welfare

if the benefit from the synergies exceeds the social cost of increased market power.

For a firm to price discriminate,

it must have some market power.

One problem with government operation of monopolies is that

the government typically has little incentive to reduce costs.