Exam 10: Monopoly

Some argue that the system of in-state and out-of-state tuition at public universities is an example of price discrimination. Is this argument valid? What conditions are necessary for a university to engage in price discrimination?

Free

(Essay)

4.9/5

(36)

Question 1

Correct Answer:

Verified

The system of in-state and out-of-state tuition at public universities is an example of price discrimination if the price elasticity of demand differs between the two groups. Assuming these two groups have different price elasticities, public universities would have to be able to distinguish between the two groups, a distinction that can readily be made. Because the price elasticity of demand is lower (in absolute value) for out-of-state students, they pay more than in-state students.

The deadweight loss from monopoly is the result of

Free

(Multiple Choice)

4.8/5

(48)

Question 2

Correct Answer:

Verified

A firm that takes advantage of economies of scale and expands to become the only producer in the industry is called

Free

(Multiple Choice)

4.7/5

(36)

Question 3

Correct Answer:

Verified

The monopolist is the sole seller of a product for which there are no close substitutes.

(True/False)

4.8/5

(27)

Question 4

One barrier to entry is a patent granted by the government.

(True/False)

4.8/5

(32)

Question 5

The profit-maximizing output level is determined on a monopoly diagram by finding the point at which the demand and marginal cost curves cross.

(True/False)

4.8/5

(28)

Question 6

If a firm is producing at a point at which marginal revenues are greater than marginal costs, it should decrease its level of production.

(True/False)

4.9/5

(32)

Question 7

Which of the following statements concerning price discrimination among consumers with different price elasticities is true?

(Multiple Choice)

4.9/5

(36)

Question 8

Refer to the figure below. Calculate the monopolist's profit at the profit-maximizing output level.

(Essay)

5.0/5

(34)

Question 9

In the generic diagram for a monopoly, the firm's profits per unit of output are determined by the

(Multiple Choice)

4.7/5

(39)

Question 10

When the monopoly's marginal revenue is positive, its

(Multiple Choice)

4.7/5

(36)

Question 11

Monopoly power occurs when a shift in market demand does not affect a monopoly's profits.

(True/False)

4.7/5

(42)

Question 12

How does the fact that marginal benefit is greater than marginal cost indicate a deadweight loss?

(Essay)

4.9/5

(39)

Question 13

Explain why participants in an industry would want the government to require licenses for them to operate, even if the licenses are costly to obtain.

(Essay)

4.9/5

(35)

Question 14

Exhibit 10-10 -Refer to Exhibit 10-10. Calculate the deadweight loss from the monopoly.

(Essay)

4.8/5

(34)

Question 15

Suppose you observe that as output in the market increases, total revenue for the market declines. This would imply that

(Multiple Choice)

4.7/5

(37)

Question 16

Exhibit 10-9 -Refer to Exhibit 10-9. The difference between marginal benefit and marginal cost for the profit-maximizing monopoly is

(Multiple Choice)

4.8/5

(37)

Question 17

The price-cost margin is equal to the price elasticity of demand.

(True/False)

4.7/5

(33)

Question 18

A firm with market power can always sell more by raising the price of its product.

(True/False)

4.8/5

(29)

Question 19

For a monopoly to maximize profits, price must exceed marginal cost.

(True/False)

4.7/5

(39)

Question 20

Showing 1 - 20 of 182

Some argue that the system of in-state and out-of-state tuition at public universities is an example of price discrimination. Is this argument valid? What conditions are necessary for a university to engage in price discrimination?

The deadweight loss from monopoly is the result of

A firm that takes advantage of economies of scale and expands to become the only producer in the industry is called

The monopolist is the sole seller of a product for which there are no close substitutes.

One barrier to entry is a patent granted by the government.

The profit-maximizing output level is determined on a monopoly diagram by finding the point at which the demand and marginal cost curves cross.

If a firm is producing at a point at which marginal revenues are greater than marginal costs, it should decrease its level of production.

Which of the following statements concerning price discrimination among consumers with different price elasticities is true?

Refer to the figure below. Calculate the monopolist's profit at the profit-maximizing output level.

In the generic diagram for a monopoly, the firm's profits per unit of output are determined by the

When the monopoly's marginal revenue is positive, its

Monopoly power occurs when a shift in market demand does not affect a monopoly's profits.

How does the fact that marginal benefit is greater than marginal cost indicate a deadweight loss?

Explain why participants in an industry would want the government to require licenses for them to operate, even if the licenses are costly to obtain.

Exhibit 10-10 -Refer to Exhibit 10-10. Calculate the deadweight loss from the monopoly.

Suppose you observe that as output in the market increases, total revenue for the market declines. This would imply that

Exhibit 10-9 -Refer to Exhibit 10-9. The difference between marginal benefit and marginal cost for the profit-maximizing monopoly is

The price-cost margin is equal to the price elasticity of demand.

A firm with market power can always sell more by raising the price of its product.

For a monopoly to maximize profits, price must exceed marginal cost.

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

The Demand Curve and the Behavior of Consumers

The Supply Curve and the Behavior of Firms

The Interaction of People in Markets

Costs and the Changes at Firms Over Time

The Rise and Fall of Industries

Product Differentiation, Monopolistic Competition, and Oligopoly

Antitrust Policy and Regulation

Labor Markets

Taxes, Transfers, and Income Distribution

Public Goods, Externalities, and Government Behavior

Capital and Financial Markets

Reading, Understanding, and Creating Graphs

Consumer Theory With Indifference Curves

Producer Theory With Isoquants

Filters