ECON HW 7

If the inverse demand curve a monopoly faces is p = 100 -2Q and MC is constant at 16, then profit maximization is achieved when the monopoly sets price equal to

58

The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, producer surplus equals

A + B + C + D + E

The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, social welfare equals

A + B + C + D + E

One different between a monopoly and a competitive firm is that

A monopoly faces a downward-slopping downward curve.

When the marginal revenue curve intersects the horizontal axis

Demand is unitary elastic

The more INELASTIC the demand curve, a monopoly will

Lose fewer sales as it raises its price

The above figure shows the demand and marginal cost curves for a monopoly. Under monopoly, consumer surplus equals

None of these.

If the inverse demand function for a monopoly's product is a p = a -bQ, then the firm's marginal revenue function is

a - 2bQ

As other firms enter a monopoly's market, the demand curve a monopoly faces

becomes more elastic

The above figure shows the demand and marginal cost curves for a monopoly. The deadweight loss of this monopoly equals

c + f

As other firms enter a monopoly's market, the monopoly's market power

declines

A monopoly that is maximizing profits operates in the ________ portion of the demand curve.

inelastic

The ability of a monopoly to change a price that exceeds marginal cost depends on the

price elasticity of demand

If a market is controlled by a perfect-price-discriminating monopoly then

there is no consumer surplus

The above figure shows the market for particular good. If the market is controlled by a perfect-price-discriminating monopoly, consumer surplus equals

zero

The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, the deadweight loss equals

zero.

The monopolists marginal revenue curve

lies below the demand curve

The more ELASTIC the demand curve, a monopoly will

lose more sales as it raises its price

A monopoly maximizes profit by setting

marginal revenue equal to marginal cost