Pure Monopoly Asarta Module Russell B

Suppose Carl's Candies sells 100 boxes of candy for $4 each. The total fixed cost of the 100 boxes is $100 and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a total profit of:

$150

Suppose Carl's Candies sells 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100, and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a profit per unit of:

$2.50

Suppose Carl's Candies sells 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100, and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a profit per unit of: Multiple choice question.

$2.50

Suppose Carl's Candies sells 100 boxes of candy for $5 each. The total fixed cost of the 100 boxes is $100 and the average variable cost of the 100 boxes is $1.50 per box. Carl's makes a total profit of:

$250

Price is the practice of selling the same good or service to different consumers at different prices.

Discrimination

The practice of selling the same good or service to different consumers at different prices is called price _____. (Remember answer in just one word)

Discrimination

Third-degree price discrimination charges different prices to different consumers in order to:

Increase profits

The perfect monopoly extracts all surplus from consumers, yielding higher profits than any other pricing method when it employs which of the following?

Perfect price discrimination Personal pricing First-degree price discrimination

Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?

Price is lower and Quantity is higher

Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?

Price is lower, Quantity is higher

In a pure monopoly, the firm is willing to sell to anyone willing and able to pay at least the marginal cost of production. Multiple choice question.

The result is that output is produced where D = MC

The efficiency loss resulting from a monopolistic market is called:

a deadweight loss

By charging consumers the highest price they are willing and able to pay, _____ extracts all surplus from consumers yielding higher profits than any other pricing method available to the firm.

a pure monopoly

When a firm charges different prices per unit for different quantities or blocks of a good or service, it practices second-degree price discrimination. This is most commonly done by:

a pure monopoly

Pure monopolies do not achieve _____ efficiency meaning that they do not produce the amount of output that maximizes the sum of producer and consumer surplus.

allocative

In a pure monopoly, the firm is willing to sell to anyone willing and able to pay at least the marginal cost of production. The result is that output is produced where D = MC, which is _____ efficient.

allocatively

For a monopoly, the marginal revenues per unit fall _____ the price per unit because when the price _____, the monopoly gives up some revenue on units it could have sold at higher prices.

below, falls

Second-degree price discrimination is also known as _____ pricing.

block

Second-degree price discrimination is also known as: Multiple choice question.

block pricing

A monopoly will charge consumers the price that they are willing and able to pay for the amount of output available which is shown along the _____ curve.

demand

The _____ curve faced by a perfectly competitive firm is perfectly elastic.

demand

When a pure monopoly practices first-degree price discrimination, the _____ curve becomes the marginal revenue curve

demand

When a pure monopoly practices first-degree price discrimination, the _____ curve becomes the marginal revenue curve.

demand

The value of the _____ surplus that is forgone when a market is not allowed to adjust to its competitive equilibrium is the deadweight loss.

economic

Total revenue minus the implicit costs and explicit costs of production is _____ profit.

economic

A profit-maximizing monopoly will always operate on the ___ portion of a linear demand curve

elastic

The demand curve faced by a perfectly competitive firm is perfectly

elastic

If the marginal revenue associated with selling one more unit of output is positive, the demand is:

elastic because this would increase total revenue.

A business will charge a lower price to the group with the relatively more _____ demand and a higher price to the group with the relatively more _____ demand.

elastic, inelastic

The marginal revenue is the:

extra or additional revenue associated with the production of an additional unit of output.

By charging consumers the highest price they are willing and able to pay, the pure monopoly:

extracts all surplus from consumers.

For the profit-maximizing level of output, the price charged by a monopoly is not just different but _____ than marginal revenue.

greater

Monopolies charge prices _____ than those experienced by consumers in purely competitive markets.

greater

Total revenue minus the _____ costs and _____ costs of production is economic profit. (Enter one word in each blank.)

implicit, explicit

Monopolies produce _____ output than competitive markets and are _____ likely to hire labor. (Enter one word in each blank.)

less, less

The level of profit that occurs when the total revenue is less than the total cost is called an economic _____.

loss

A business will charge a(n) _____ price to the group with the relatively more elastic demand and a(n) _____ price to the group with the relatively more inelastic demand.

lower, higher

Price discrimination is only possible when a firm is a price _____

maker

For a monopoly, the ____ revenue curve is located below the ____ curve

marginal, demand

For a monopoly, the _____ revenue curve is located below the _____ curve.

marginal, demand

A pure _____ has the overall demand to itself because it is the only seller in a market.

monopoly

If a(n) _____ wants to sell more units it must lower the price for every unit it sells. (Use one word to fill in the blank.)

monopoly

Second-degree price discrimination generates the best outcome for which of the following market structures?

monopoly

When a firm charges different prices per unit for different quantities or blocks of a good or service, it practices second-degree price discrimination. This is most commonly done by a pure _____

monopoly

A(n) _____ profit simply indicates that the firm is doing just as well as it would have if it had chosen to use its resources to produce a different product or to compete in a different industry.

normal

The practice of charging each and every consumer the price she is willing and able to pay for a good or service describes:

personal pricing. perfect price discrimination. first-degree price discrimination.

The practice of charging each and every consumer the price that she is willing and able to pay for a good or service describes first-degree _____ discrimination.

price

The practice of selling the same good or service to different consumers at different prices is called _____ discrimination.

price

The practice of selling the same good or service to different consumers at different prices is known as:

price discrimination

Allocative efficiency is:

producing the goods and services so that their marginal benefit equals their marginal cost.

When a pure monopoly practices first-degree price discrimination,:

the demand curve becomes the marginal revenue curve.

Price discrimination is best described as

the practice of selling the same good or service to different consumers at different prices.

Normal profit is also known as _____ economic profit.

zero

When a firm has a loss, the total _____ is less than the total _____.

revenue, cost

The practice of charging different prices per unit for different quantities, or blocks, of a good or service is called:

second-degree price discrimination. block pricing.

Profit equals total _____ minus total _____. (Enter one word in each blank.)

revenue, cost

By charging consumers the highest price they are willing and able to pay, the pure monopoly extracts all surplus from consumers

yielding higher profits than any other pricing method available to the firm.

By charging consumers the highest price they are willing and able to pay, the pure monopoly extracts all surplus from consumers yielding higher _____ than any other pricing method available to the firm.

profits

All firms maximize profits by producing the quantity of output at which the marginal _____ is equal to the marginal _____. (Enter one word in each blank.)

revenue, cost

Price discrimination is best described as:

the practice of selling the same good or service to different consumers at different prices.

In the long run, perfectly competitive firms achieve _____ efficiency by producing at the lowest cost and _____ efficiency by producing what consumers want.

productive, allocative

_____ equals the total revenue minus the total cost. (Use one word to fill in the blank.)

profit or total profit

A monopoly should produce output until the marginal _____ equals the marginal _____.

revenue, cost

When a pure monopoly practices first-degree price discrimination, the demand curve becomes the _____ _____ curve. (Enter one word in each blank.)

marginal, revenue

_____ efficiency is producing output at the lowest possible average total cost of production.

productive

Productive efficiency is:

using the fewest resources possible to produce a good or a service.