ECON chapter 13
(Figure: Maximum Willingness to Pay) Refer to the figure. What is the maximum price that the consumer is willing to pay for 100 units?
-$100
(Figure: Regulated versus Unregulated Monopolist) Refer to the figure. Calculate the change in consumer surplus from an unregulated monopoly to a regulated monopoly.
-$2,800
(Figure: Regulated versus Unregulated Monopolist) Refer to the figure. Calculate the deadweight loss when this monopoly is unregulated.
-$400
(Figure: Regulated versus Unregulated Monopolist) Refer to the figure. Calculate consumer surplus when this monopoly is regulated.
-$6,400
(Figure: Maximum Willingness to Pay) Refer to the figure. What is the profit-maximizing quantity for this monopolist?
-110
In which of the following scenarios will automobile prices be the lowest?
-A competitive automobile company buys its steel from a competitive steel producer.
What is the profit maximization condition for a monopolist?
-MR = MC
Which of the following statements is TRUE?
-Monopolies create incentives for additional research and development.
Which of the following is always TRUE for monopolies?
-P > MR
Which of the following represents the nature of a monopolist's deadweight loss?
-Some consumers are willing to pay more than the monopolist's marginal cost of production, but the monopolist does not produce these units.
(Figure: Maximum Willingness to Pay) Refer to the figure. What is the profit that the monopolist is earning?
-There is not enough information to answer the question.
When a single firm can supply the entire market at lower cost than two or more firms, we say that the industry is:
-a natural monopoly.
Refer to the figure. Deadweight loss caused by monopoly pricing is represented by the area:
-def
The more inelastic the demand curve for a product is, the:
-higher is the monopolist's price markup.
Apple's iPod provides an example that market power may arise from:
-innovation.
The power to raise price above marginal cost without fear that other firms will enter the market is:
-market power.
In a monopoly market:
-the lure of above-normal profits may give a firm an incentive to develop new products and technologies.
When comparing a monopoly with a competitive industry, monopoly quantity:
-will be lower, and monopoly price will be higher, than that of a competitive firm.