ECN 212 Quiz 16

Which of the following must a firm be able to do to successfully price discriminate?

ALL -divide buyers into different groups according to their willingness to pay - prevent resale of the good or service - identify into which group (high willingness to pay or low willingness to pay) a buyer falls

Is a single-price monopoly efficient?

No, because it creates a deadweight loss.

A monopoly market has

a single firm.

When a monopoly price discriminates, it

converts consumer surplus into economic profit.

A single-price monopoly has a marginal revenue curve that is

downward sloping and lies below the demand curve.

In equilibrium, rent seeking eliminates the

economic profit.

A natural monopoly is one that arises from

economies of scale.

With perfect price discrimination, the quantity of output produced by a monopoly is ________ the quantity produced by a perfectly competitive industry.

equal to but not greater than

If a monopoly is able to perfectly price discriminate, then consumer surplus is

equal to zero.

For a single-price monopoly, price is

greater than marginal revenue.

At a level of output when regulators require a natural monopoly to set a price that is equal to marginal cost, the firm

incurs an economic loss.

Once a monopoly has determined how much it produces, it will charge a price that

is determined by its demand curve.

A legal barrier is created when a firm

is granted a public franchise, government license, patent, or copyright.

Monopolies ________ fair and ________ efficient.

might be; might be

Two types of barriers to entry are called ________ barriers to entry and ________ barriers to entry.

natural; legal

When demand is elastic, marginal revenue is

positive.

If a perfectly competitive industry is taken over by a single firm that operates as a single-price monopoly, the price will ________ and the quantity will ________.

rise, decrease

A natural barrier to entry is defined as a barrier that arises because of

technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms.

One of the requirements for a monopoly is that

there is a product with no close substitutes.