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Which one of the following is not a possible barrier to entry high enough to keep competing firms out of a monopoly industry?


A) The monopoly firm has control of a key resource necessary to produce a good.
B) There are important network externalities in supplying a good or service.
C) Large economies of scale that result in a natural monopoly.
D) A high concentration ratio.

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Figure 8-6 Figure 8-6 Figure 8-6 shows the cost and demand curves for a monopolist. -Refer to Figure 8-6.The monopolist's total revenue is A) $1116. B) $1488. C) $1726.40. D) $1826. Figure 8-6 shows the cost and demand curves for a monopolist. -Refer to Figure 8-6.The monopolist's total revenue is


A) $1116.
B) $1488.
C) $1726.40.
D) $1826.

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Figure 8-14 Figure 8-14 -Refer to Figure 8-14 to answer the following questions. a.What quantity will this monopoly produce and what price will it charge? b.Suppose the monopoly is regulated.If the regulatory agency wants to achieve economic efficiency,what price should it require the monopoly to charge? c.To achieve economic efficiency,what quantity will the regulated monopoly produce? d.Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency? e.Suppose the government decides to regulate the monopoly by imposing a price ceiling of $35.What quantity will the monopoly produce and what price will the monopoly charge? f.With the price ceiling of $35,what profit will the monopoly earn? -Refer to Figure 8-14 to answer the following questions. a.What quantity will this monopoly produce and what price will it charge? b.Suppose the monopoly is regulated.If the regulatory agency wants to achieve economic efficiency,what price should it require the monopoly to charge? c.To achieve economic efficiency,what quantity will the regulated monopoly produce? d.Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency? e.Suppose the government decides to regulate the monopoly by imposing a price ceiling of $35.What quantity will the monopoly produce and what price will the monopoly charge? f.With the price ceiling of $35,what profit will the monopoly earn?

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a.Quantity = 835 units and Price = $59.
...

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What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

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Average revenue is equal to price for an...

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The demand curve for a monopoly firm


A) is perfectly inelastic.
B) lies below its marginal revenue curve.
C) is the same as the market demand curve.
D) is horizontal.

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Draw a graph that shows producer surplus,consumer surplus,and deadweight loss in a market where the seller practices perfect price discrimination.Be sure to identify the demand curve,the marginal revenue curve,the marginal cost curve,and the profit-maximising quantity on the graph.

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The perfect price discriminator sells Q3 ...

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Suppose a monopoly is producing its profit-maximising output level.Now suppose the government imposes a lump-sum tax on the monopoly,independent of its output.As a result,the monopoly's profit will fall.

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Compared to perfect competition,the consumer surplus in a monopoly


A) is unchanged because price and output are the same.
B) is lower because price is higher and output is lower.
C) is higher because price is higher and output is the same.
D) is eliminated.

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Are restaurant discount vouchers a form of price discrimination? Why or why not?

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Yes,vouchers are a form of price discrim...

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Table 8-3 Table 8-3 Julie plans to start a pet-sitting service. She surveyed her neighbourhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 8-3 above shows a portion of her survey results. -Refer to Table 8-3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7.What is the value of the consumer surplus enjoyed by her customers? A) $39 B) $28 C) $11 D) $0 Julie plans to start a pet-sitting service. She surveyed her neighbourhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 8-3 above shows a portion of her survey results. -Refer to Table 8-3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7.What is the value of the consumer surplus enjoyed by her customers?


A) $39
B) $28
C) $11
D) $0

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Some consumer electronic products such as plasma TVs,DVD players and digital cameras are introduced at very high prices but,over time,their prices start falling (beyond what could be attributed to falling costs as companies take advantage of economies of scale and cheaper technologies) .Which of the following is the best explanation for this observation?


A) More firms are likely to enter the consumer electronic market over time, forcing market prices down.
B) Early adopters of these new products typically have a higher demand and higher income compared to those who are willing to wait.
C) Early adopters are more quality conscious and are willing to pay higher prices for the initial production of these goods.
D) After satisfying the demand for early adopters, firms lower price to attract the more price-sensitive consumers.

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A monopolist faces


A) a perfectly elastic demand curve.
B) a perfectly inelastic demand curve.
C) a horizontal demand curve.
D) a downward-sloping demand curve.

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Which of the following is a reason why airline yield management is an effective method to increase revenue?


A) Because airlines have invested heavily in developing computer models that identify optimal pricing strategies in the various market segments.
B) Because airlines have successfully induced customers to reveal their resources and preferences by offering them different versions of the product, such as business class and coach plane tickets.
C) Because a ticket is a contract to transport a specific person, and is not transferable.
D) Because airlines have a monopoly in long-distance carriage.

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What is perfect price discrimination and why do economists believe that no firm is able to practice perfect price discrimination?

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Perfect price discrimination,also known ...

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If a monopolist's price is $50 at the output where marginal revenue equals marginal cost and average total cost is $43,then the average profit is $7.

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Assume that a monopolist practices perfect price discrimination.The firm's marginal revenue curve will


A) be perfectly elastic.
B) be equal to its demand curve.
C) will be perfectly inelastic.
D) will lie below its demand curve.

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Explain why the monopolist has no supply curve?

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A supply curve shows the relationship be...

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Which of the following is a reason why a firm would not engage in price discrimination?


A) Price discrimination is illegal in some western states and the owners of firms in these states face civil or criminal prosecution if they engage in price discrimination.
B) Some firms are not able to segment the market for the products they sell.
C) Some firms do not want to violate the law of one price.
D) The transaction costs associated with selling the product exceed the price of the product.

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Table 8-1 Table 8-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 8-1. -Refer to Table 8-1.What is the marginal revenue from the sale of the 12th unit? A) $75 B) $50 C) $20 D) -$5 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 8-1. -Refer to Table 8-1.What is the marginal revenue from the sale of the 12th unit?


A) $75
B) $50
C) $20
D) -$5

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A natural monopoly is most likely to occur in which of the following industries?


A) The pharmaceutical industry because the development and approval of new drugs through the Therapeutic Goods Administration can take more than 10 years.
B) The diamond mining and marketing industry because one firm can control a key resource.
C) The software industry because of the importance of network externalities.
D) An industry where fixed costs are very large relative to variable costs.

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