Exam 9: Monopoly Markets

Table 9-3 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 9-3 above shows a portion of her survey results. -Refer to Table 9-3.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?

Which one of the following about a monopoly is false?

From an economic perspective,price discrimination is desirable because

Perfect price discrimination will lead a firm to produce up to the point where price equals marginal cost,the efficient level of output.

Network externalities

What is a network externality?

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

If a firm could practice perfect price discrimination,it would

Insurance companies typically charge women lower prices than men for automobile insurance.Is this an example of price discrimination?

In discussions of barriers to entry,what is meant by the term 'virtuous cycle'?

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 monopolist will increase the price of its product to cover its higher cost.

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.As a result of this change

Assume that a monopolist practices perfect price discrimination.The firm will produce an output rate

The market demand curve facing a monopolist is more elastic than the market demand curve facing a monopolistic competitor.

Table 9-3 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 9-3 above shows a portion of her survey results. -Refer to Table 9-3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7.How many hours will be purchased and what is her total revenue?

A monopoly is defined as a firm that has the largest market share in an industry.

Figure 9-6 Figure 9-6 shows the cost and demand curves for a monopolist. -Refer to Figure 9-6.The monopolist's total cost is

Which of the following is a necessary condition for successful price discrimination?

Figure 9-14 -Refer to Figure 9-14 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?

Which of the following statements is true?