econ 16

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when demand is elastic, marg revenue is

a positive

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

c is determined by its demand curve

Monopolies ____ fair and ____ efficient.

c might be, might be

if a perfectly competitive industry is taken over by a single firm that operates as a single price monopoly the price will __ and quantity will __

c rise, decrease

a single price monopoly can sell 1 unit for 9$ to see 2 units the price must be $8.50 per unit, the marg revenue from selling the second unit is

d $8

if the natural monopoly illustrated in figure 16.7 was regulated using a marg cost pricing rule the price would be

b between $100.01 and $200

in equilibrium, rent seeking eliminates the

b econ profit

to max it profits a single orice monopoly produces the quantity at which

b marg revenue equals marg cost

is a single monopoly efficient

b no bc it creates deadweight loss

price discrimination lowers a firms profit

f

the buyer of a monopoly always makes an econ profit

f

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

a equal to zero

For a single-price monopoly, price is

a greater than marg revenue

if a natural monopoly is told to set a price equal to its avg cost then the firm

a is not able to set the marg revenue equal to marg cost

The theory that regulation seeks an efficient use of resources is the

a social interest theory

figure 16.3 shows market for gas in a town. if the market is perfectly competitive, the quantity is __ million gallons a year and if the market is taken over by a firm that operates as a single price monopoly, the quantity is __ million gallons a year

c 30,20

which of the following are price discrimination

c II,III( charging business flyers a higher airline than tourist and charging more for the first pizza than second)

which of the following best describes the capture theory of regulation

c III only ( regulatio helps firms max econ profit)

if the natural monopoly illustrated in figure 16.7 was regulated using an avg total cost pricing rule the price would be

c between $200.01-$300

when a monopoly price is discriminates, it

c converts econ profit into econ profit

w perfect price discrimination the quantity of output produced by a monopoly is _ the quantity produced by a perfectly competitive market

c equal to but not greater than

when regulators require a natural monopoly to set a price that is equal to its marg cost, the firm

c incurs an econ loss

Comparing single-price monopoly to perfect competition, monopoly

d decreases the amount of consumer surplus

figure 16.3 shows the market for gas in a town. If the market is perfectly competitive the price is __ per gallon and if the market is taken over by a firm that operates as a single price monopoly the price is __

e $2,$3

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

e I,II,III

a monopoly redistributes consumer surplus so that consumers gain and producer loses

f

for a single price monopoly, a marg revenue exceeds price

f

marg revenue is always positive for a monopoly

f

price cap regulation is designed to give firms the incentive to raise the price of their output provided competition in the market increases

f

price disccrimination converts producer surplus into consumer surplus

f

a monopoly changes a higher price than a perfectly competitive industry

t

a regulated natural monopoly prodcues the efficient quantity of output when it is regulated to use a marg cost pricing rule

t

a single price monopoly maxs profit by producing the quantity at which marg revenue equals marg cost

t

social interest theory assumes that the political process introduces regulation that eliminates deadweight loss

t

w perfect price discrimination the firm produces the efficient quantity of output and has a larger profit than it would if price didt discrimate

t


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