Microeconomics - LC13

Given the graph, a profit-maximizing firm in a perfectly competitive industry would charge a price of:

$20.

Given the graph, if the monopolist perfectly price discriminates, deadweight loss will be $_____.

0

The graph shows the revenue curves and cost curves for a monopoly. A single-price monopolist would produce quantity _____ and charge price _____.

D; G

The profit-maximizing rule for the perfectly competitive firm is that it will choose output such that:

P = MC.

All of the following present challenges to policy makers who want to limit the market power arising from network externalities EXCEPT which one?

Policy interference in the market can easily lead to a natural monopoly.

As the number of prices a monopolist charges increases, all the following are true EXCEPT which one?

The consumer surplus increases.

When an airline charges a lower price to those who purchase far in advance of their trip, it is implementing:

an advance-purchase restriction.

A natural monopoly is an industry:

characterized by increasing returns to scale.

If the De Beers diamond monopoly lowers the price of a diamond from $800 to $750 and sales increase from four to five diamonds, the price effect is a(n):

decrease in total revenue of $200.

In order to successfully practice price discrimination, different groups of a monopolist's customers must have _____.

different sensitivities to price

Goods that are different but considered somewhat substitutable by consumers are called _____ goods.

differentiated

The marginal revenue curve for a monopolist is _____.

downward sloping

The market demand curve for a monopolist is:

downward sloping.

The graph shows the revenues and costs for a natural monopoly. The fact that it is a natural monopoly is revealed by the:

downward-sloping average total cost curve.

A natural monopoly:

has a declining average total cost curve.

Cecil Rhodes was able to establish the De Beers monopoly because:

he had control of a scarce resource.

In practicing price discrimination, the monopolist should charge _____ to consumers with a low price elasticity of demand.

higher prices

Compared with a single-price monopolist, price discrimination generally _____ efficiency.

increases

When a monopolist practices price discrimination, the monopolist:

increases profits by capturing consumer surplus.

For a monopolist, the marginal revenue curve:

lies below the demand curve.

In practicing price discrimination, the monopolist should charge _____ to consumers with a high price elasticity of demand.

lower prices

A pharmaceutical company with a patent is an example of a:

monopoly protected by a government-created barrier.

Given the graph, the monopolist will maximize profit at an output:

of 1,000.

The tuna fishing industry is an example of which market structure?

perfect competition

The table shows the demand curve for barrels of spring water sold by James, a monopolist. If James lowers his price from $11 to $10, the total effect from both the quantity effect and the price effect is:

positive marginal revenue of $5.

An unregulated natural monopolist that maximizes profit will:

produce at a point where the price exceeds average total cost.

Compared to a perfectly competitive firm, a monopolist in a retail market:

produces less output.

A patent on a new type of electric motor would give the inventor a:

temporary monopoly.

The demand curve for a monopolist is:

the market demand curve.