Econ Questions I missed
determinants of supply
1. input price 2. productivity/technology 3. price of related outputs 4. expectations 5. type and number of sellers anything that changes cost of productivity will shift supply curve
How does marginal revenue compare to price for a seller with market power?
Beyond the first unit sold, marginal revenue is below price.
Why would it be a bad idea for a retailer to use "wearing nail polish" as the basis for segmenting customers into groups for price discrimination?
People can easily switch from wearing nail polish to not wearing it.
A business that price discriminates will produce at what output level?
Quantity 3
Why is market power necessary for price discrimination?
Without market power, a seller would lose customers if he tried to charge a higher price.
If a monopolist is producing a quantity that generates MC = MR, then profit:
is maximized.
The supply curve of a firm is also its _____ cost curve.
marginal private
In a perfectly competitive market, a company's marginal revenue equals _____. For a company with market power, marginal revenue is _____.
price; less than price
corrective taxes
initial curve
If Penelope, a monopolist, is producing a quantity where MC = P, then profit:
can be increased by decreasing production.
If Penelope, a monopolist, is producing a quantity where MC > MR, then profit:
can be increased by decreasing production.
determinants of demand shift
1. income 2. preferences 3. expectations 4. price of related goods 5. congestion and network effects 6. type and number of buyers
If a firm faces a downward-sloping demand curve:
P > MR.
If a monopolist produces a quantity that generates MC > MR, then profit:
can be increased by increasing price.
When a company practices price discrimination, it will keep adding customers until the point where the
company's marginal cost equals the last customer's marginal benefit.
