micro chapter 12

Which of the following does the monopolist not have? Multiple choice question. A marginal revenue curve A demand curve A marginal cost curve A supply curve

A supply curve

Why might a monopolist accept a less-than-maximum per-unit profit? Multiple choice question. The maximum per-unit profit is not possible. Maximum per-unit profit is strongly tied to lower total profit. Maximum per-unit profit always maximizes per-unit cost as well. Additional sales more than compensate for the lower profit per unit.

Additional sales more than compensate for the lower profit per unit.

What is the term for factors that prohibit firms from entering an industry? Multiple choice question. Reduction of entry Barriers to business Lack of entry Barriers to entry

Barriers to entry

______ of essential property is a barrier to entry into an industry. Control Mergers Deterioration Sale

Control

What term is used to describe declining average total costs with added firm size? Multiple choice question. Barriers to entry Pure monopoly Diseconomies of scale Economies of scale

Economies of scale

How does a monopoly generally transfer income? Multiple choice question. From the owners of the monopoly to consumers From competitive firms to the owners of the monopoly From the owners of the monopoly to the government From consumers to the owners of the monopoly

From consumers to the owners of the monopoly

______ create(s) legal barriers to entry. Multiple choice question. Firms Competitors The market Government

Government

If producing is preferable to shutting down, a profit-seeking monopolist will produce up to the output at which _______. Multiple choice question. P = ATC MR > MC P = MC MR = MC

MR = MC

Select all that apply Which of the following are characteristics of public utilities? Multiple select question. Low barriers to entry Monopolies or near monopolies Government owned or regulated Government has little control over price

Monopolies or near monopolies Government owned or regulated

Select all that apply Which of the following are conditions necessary for price discrimination? Multiple select question. No resale Advertising Market segregation Homogeneous market Monopoly power

No resale Market segregation Monopoly power

If the objective of government is to achieve allocative efficiency, what kind of price should government establish for the monopolist? Multiple choice question. One that is equal to its marginal cost. One that is above its marginal cost. One that is fair to all consumers. One that is below its marginal cost.

One that is equal to its marginal cost.

Which of the following is considered a barrier to entry into an industry? Multiple choice question. Low start-up costs Ownership of essential property Standardized products "Price taker" status

Ownership of essential property

Select all that apply Which of the following are assumptions made in the model of pure monopoly? Multiple select question. The firm is a multi-price monopolist and charges different prices for all units of output. Patents, economies of scale, and resource ownership secure the firm's monopoly. The government regulates the firm. No unit of government regulates the firm. The firm is a single-price monopolist and charges the same price for all units of output.

Patents, economies of scale, and resource ownership secure the firm's monopoly. No unit of government regulates the firm. The firm is a single-price monopolist and charges the same price for all units of output.

What is the term used to refer to charging different prices to different buyers of a specific product? Multiple choice question. Price elasticity Price monopoly Price utility Price discrimination

Price discrimination

Select all that apply Which of the following are entry barriers created by monopolists? Multiple select question. Price reductions Collaboration with government Imposition of tariffs and quotas Increased advertising

Price reductions Increased advertising

Select all that apply Which of the following are potential solutions to the economic losses incurred by a regulated monopoly caused by socially optimal pricing? Multiple select question. Public subsidies Production quotas Tariffs Price discrimination

Public subsidies Price discrimination

Which of the following exists when a single firm is the sole producer of a product for which there are no close substitutes? Multiple choice question. Price taker Pure monopoly Deregulated monopoly Oligopoly

Pure monopoly

Select all that apply If a firm is found guilty of achieving a monopoly through anticompetitive actions, then which of the following may occur? Multiple select question. The firm may be forced into filing for bankruptcy. The firm may be expressly prohibited from engaging in certain business activities. The firm may be broken into two or more competing firms. The firm may be required to testify before Congress.

The firm may be expressly prohibited from engaging in certain business activities. The firm may be broken into two or more competing firms.

Which of the following explains why a pure monopolist is able to maintain an economic profit in the long run? Multiple choice question. There are no new entrants to decrease supply, drive up price, and eliminate profit. There are no new entrants to increase supply, drive down price, and eliminate profit. There are no new entrants to increase supply, drive up price, and eliminate profit. There are no new entrants to decrease supply, drive down price, and eliminate profit.

There are no new entrants to increase supply, drive down price, and eliminate profit.

How much will a profit-seeking monopolist produce if producing is preferable to shutting down? Multiple choice question. As much as possible, since more production means more revenue Up to the output at which marginal revenue exceeds marginal cost Up to the output at which marginal revenue is less than marginal cost Up to the output at which marginal revenue equals marginal cost

Up to the output at which marginal revenue equals marginal cost

When a firm produces a specific output level at a higher cost than the necessary cost for that level of output, it is called ______. Multiple choice question. economies of scale simultaneous consumption X-inefficiency rent-seeking expenditures

X-inefficiency

If the objective of government is to achieve _______ efficiency, it should establish a legal price for the monopolist that is equal to its marginal cost.

allocative

A monopolist does not achieve productive efficiency because it produces a level of output that does not correspond to the minimum point of the _______________ ___________cost curve.

average total

The monopolist's level of output is not at the minimum point of ______, meaning it will not be productively efficient. Multiple choice question. marginal revenue average profit average variable cost average total cost

average total cost

Economies of scale refer to ______ average total costs with added firm size. Multiple choice question. constant marginal declining rising

declining

With a natural monopoly the demand curve intersects the long-run average total cost curve where the long-run average total cost curve is still _________

declining

A monopolist will never choose a price-quantity combination where price reductions cause: Multiple choice question. an increase in total revenue a decrease in total revenue marginal revenue to rise a decrease in marginal revenue

decrease in total revenue

Price __________, or charging different prices to different consumers, is widely practiced in the US economy.

discrimination

The practice of charging different prices to different buyers for a specific product is known as price ________

discrimination

Price makers are firms with: Multiple choice question. downward-sloping demand curves vertical demand curves horizontal demand curves upward-sloping demand curves

downward-sloping demand curves

Multiple Choice Question The demand curve intersects the natural monopolist's long-run average total cost curve at a point where long-run average total costs are still falling, due to ______. Multiple choice question. the minimum efficient scale diseconomies of scale limited capital economies of scale

economies of scale

The monopolist wants a price-quantity combination to fall in the _____ section of its demand curve, where a lower price means _____ total revenue. Multiple choice question. lower; greater elastic; greater unit-elastic; greater mid; greater inelastic; greater

elastic; greater

True or false: Price discrimination is not practiced very often in the US economy. True false question. True False

false

X-inefficiency occurs when a firm operates at a cost that is ________ (higher/lower) than the lowest cost for a particular level of output.

higher

As an example of price discrimination, airlines charge higher fares to business travelers whose demand for travel is ________ and offer lower, more restricted fares to vacationers and others with more _________ demand.

inelastic elastic

As an example of price discrimination, airlines charge higher fares to business travelers whose demand for travel is _________ and offer lower, more restricted fares to vacationers and others with more ____________ demand.

inelastic elastic

A firm can be expressly prohibited from engaging in certain business activities or can be broken into two or more competing firms when it Multiple choice question. is getting too profitable. is found guilty of monopoly abuse. is not very competitive. is found innocent of antitrust.

is found guilty of monopoly abuse

Select all that apply A monopolist does not have a supply curve because: Multiple select question. it does not equate marginal revenue with marginal cost it does not produce at the minimum average total cost it does not equate price with marginal cost there is no single, unique price associated with each level of output

it does not equate price with marginal cost there is no single, unique price associated with each level of output

Government creates barriers to entry.

legal

When a monopolist charges a higher price than a purely competitive firm would, the monopolist essentially ______. Multiple choice question. robs the government of tax income levies a "private tax" on consumers eliminates the need for simultaneous consumption mitigates the effects of income equality

levies a "private tax" on consumers

Firms with downward-sloping product demand curves are called price _______

makers

The change in total revenue associated with a one-unit change in output is called ________ revenue.

marginal

Slashing prices is an example of an entry barrier created by a(n) _______

monopolist

A(n) ______ is able to maintain an economic profit in the long run because there are no new entrants to increase supply, drive down price, and eliminate economic profit. Multiple choice question. perfectly competitive firm monopolistically competitive firm oligopolistic firm monopoly

monopoly

Patents, economies of scale, and resource ownership are all assumptions of the pure model. Listen to the complete question

monopoly

The strongest barriers to entry effectively block all ______. Multiple choice question. economies of scale marketing efforts monopolistic situations potential competition

potential competition

Market segregation must exist in order for a monopolist to ______. Multiple choice question. be a natural monopoly prevent entry of new firms price discriminate improve technologies

price discriminate

Baseball ticket sellers charge a different price for adults and children. Ballpark concession stands charge the same prices for products sold to any customer. The baseball ticket sellers are providing a successful example of Multiple choice question. marketing. price discrimination. the law of one price. near-monopoly.

price discrimination.

Select all that apply A regulated monopoly is likely to suffer losses when ______. Multiple select question. price is set to marginal cost (P = MC) it produces where marginal revenue equals marginal cost price is set to achieve the most efficient allocation of resources price is set to achieve productive efficiency

price is set to marginal cost (P = MC) price is set to achieve the most efficient allocation of resources

______ utilities are government owned or regulated.

public

Two solutions to the economic losses caused by socially optimal pricing are providing public _________ and condoning price discrimination.

subsidy

A pure monopoly exists when a single firm is the sole producer of a product for which there are no close ___. Multiple choice question. price takers complements patents substitutes

substitutes

Marginal revenue is the change in ______ revenue associated with a single-unit change in output. Multiple choice question. total average hypothetical incremental

total

The monopolist seeks maximum __________ profit, not maximum unit profit. Listen to the complete question

total