Econ 22,23,24
A monopolist
may be able to charge different people different prices or different unit prices for successive units sought by a given buyer.
Quantity for monopoly is [>,<,=] quantity for competitor
<
At long-run equilibrium for a perfectly competitive firm, price equals marginal revenue equals marginal cost equals average cost.
True
Compared to a perfect competitor, a monopolist will charge a ________ price and produce a ________ quantity.
higher; smaller
In the LONG RUN, a perfectly competitive firm produces to the point at which price, marginal revenue, marginal cost, short-run minimum average cost, and long-run minimum average cost are all ______
Equal
Along the long-run industry supply curve, firms in the industry earn zero accounting profits.
False
Consumer surplus is the sum of the total amount that consumers would have been willing to pay and the total amount that they actually pay, given the market clearing price that prevails in the perfectly competitive market.
False
The long-run average cost curve is also called the marginal cost curve.
False
Monopoly tends to result in a _____________ quantity being sold, because the price is _____________ than it would be in an ideal perfectly competitive industry in which the cost curves were essentially the same as the monopolist's.
Lower;higher
Perfectly competitive pricing is essentially _________ pricing. Therefore, the perfectly competitive solution is called efficient because _________ represents the social opportunity cost of producing one more unit of the good.
Marginal Cost
Because a monopolist produces a smaller quantity and charges a higher price than it would as a perfect competitor, a portion of the consumer surplus experienced under perfect competition becomes deadweight loss.
True
Because a monopolist produces a smaller quantity and charges a higher price than it would as a perfect competitor, total consumer surplus under a monopoly is less than it is under perfect competition.
True
Because a monopolist produces output at a point where price is greater than marginal cost, underproduction occurs
True
Economies of scale refer to what happens to average cost when all factors of production are increased.
True
If too many or too few resources are used in the production of a good, this is referred to as market failure.
True
In choosing the appropriate plant size for a single-plant firm during the long run, the firm will pick the size whose short-run average cost curve generates an average cost that is lowest for the expected rate of output.
True
In the long run, capital will flow into industries in which profitability is highest and will flow out of industries in which profitability is lowest.
True
The firm can experience economies of scale, diseconomies of scale, or constant returns to scale, all according to whether the long-run average cost curve slopes downward, slopes upward, or is horizontal, respectively.
True
The firm may experience diseconomies of scale primarily because of limits to the efficient functioning of management.
True
The long run is often called the planning horizon
True
The minimum efficient scale occurs at the lowest rate of output at which long-run average costs are minimized
True
The long-run average cost curve is horizontal.
True
We observe economies of scale for a number of reasons, including specialization, improved productive equipment, and the dimensional factor, because large-scale firms require proportionately less input per unit of output.
True
Market failure occurs when
an unrestrained market allocates too many or too few resources to a specific economic activity.
A monopoly is socially inefficient because it
charges a price greater than marginal cost.
Price discrimination is
charging different prices to different people or for different units when there are no differences in costs of production.
Provided that monopolization of a previously perfectly competitive market does not affect that market's __________ structure, the price that consumers pay for the monopolist's product is _______ than the marginal cost of producing that item.
cost;greater
If a firm's long-run average costs increase as its output increases, the firm is experiencing
diseconomies of scale
In a decreasing-cost industry, the long-run supply curve is
downward sloping.
Firms in a competitive industry can
enter or leave the industry without serious impediment.
A constant-cost industry has a ________ long-run supply curve. An increasing-cost industry has an ______________ -sloping long-run supply curve. A decreasing-cost industry has a _________ -sloping long-run supply curve.
horizontal;upward;downward
Charging different prices to different people or for different units to reflect differences in costs of production
is price differentiation.
As compared to a perfectly competitive industry, a monopoly industry with identical cost curves will
produce less and set a higher price.
When a competitive firm sells its product at a price equal to marginal cost,
society enjoys an efficient allocation of productive resources.
In order to engage in price discrimination, a firm must have
some monopoly power.
Economic efficiency means that
total output of society cannot be increased without lowering the value of the total output produced in the economy.
It is found by drawing a curve tangent to points on a series of short-run average cost curves, each corresponding to a different plant size.
true
the long run average cost curve is the planning curve
true
In the long run, perfectly competitive firms make ________ economic profits because of entry and exit whenever there are industrywide economic profits or losses.
zero
Minimum efficient scale refers to the ________ rate of output per unit time at which long-run average costs for a particular firm are at a ________.
lowest; minimum