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Exam 15: Monopoly

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Question 21

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Price discrimination adds to social welfare in the form of

A) (i) only
B) (i) and (ii) only
C) (i) and (iii) only
D) (i) , (ii) , and (iii)

E) B) and D)
F) A) and B)

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Question 22

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Figure 15-25 -Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

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Question 23

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A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151st unit of output is

A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's profit?

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. The monopolist will not produce

Scenario 15-11 Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day. -Refer to Scenario 15-11. One of Vincent's friends tells him he would be more profitable if he charged a single price of $18. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $18?

Movie theatres charge different prices to different groups of people based on the differing marginal costs that exist from group to group.

Figure 15-25 -Refer to Figure 15-25. If a regulator requires this firm to charge a socially optimal price, how much deadweight loss results?

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Which of the following is not a characteristic of a monopoly?

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

A natural monopolist's ability to price its product is

Which of the following is not an example of price discrimination by a firm?

Figure 15-4 -Refer to Figure 15-4. The marginal revenue curve for a monopoly firm is depicted by curve

Figure 15-16 -Refer to Figure 15-16. Which triangle represents the monopoly deadweight loss?

The marginal revenue curve for a monopoly firm starts at the same point on the vertical axis as the

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 60 units. The marginal revenue for the firm over this range is

A monopoly creates a deadweight loss to society because it earns both short-run and long-run positive economic profits.

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Customers who purchase an audio CD from Sally's Sounds are charged 20% more than customers who purchase the audio CD from the Sally's Sounds website. This is an example of