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 per hour.What is her marginal revenue?

A monopolist's profit-maximising price and output correspond to the point on a graph

Figure 9-10 -Refer to Figure 9-10.What is the area that represents producer surplus under a monopoly?

The term 'trust' in antitrust refers to a board of trustees that has collusive control over different companies.

Consider the following actions undertaken by a firm: A.charging the same price for products of different quality B.charging different prices to different consumers for the same product when the variation cannot be explained by cost differences C.charging different prices for products of different qualities D.charging a lower price to match a competitor's price Which of the above will be considered price discrimination?

Table 9-2 The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes.Table 9-2 shows the cost and demand data for this government protected monopolist. -Refer to Table 9-2.What is the profit-maximising quantity and price for the monopolist?

Suppose a restaurant is trying to determine how much to charge for a bowl of chili,and decides to run an experiment to see how much its customers are willing to pay by allowing them to set their own price for this menu item. a.Is charging a customer the price he or she is willing to pay for the bowl of chili an example of price discrimination? Briefly explain. b.What is it called when a firm knows every consumer's willingness to pay,and can charge every consumer a different price? What happens to consumer surplus in this situation?

Using a broad definition,a firm would have a monopoly if

Holding everything else constant,government approval of horizontal mergers is more likely to be granted if the 'market' that firms are in are broadly defined rather than narrowly defined.

Figure 9-12 Figure 9-12 shows the cost and demand curves for the ETSA. -Refer to Figure 9-12.Why won't regulators require that ETSA Power produce the economically efficient output level?

For a firm that can effectively price discriminate,who will be charged a lower price?

A patent

If a firm knew every consumer's willingness to pay and could prevent arbitrage,it could charge every consumer a different price.This practice is known as

Both first-degree price discrimination and optimal two-part tariff pricing maximise economic surplus.

Joss is a marketing consultant.Iris and Daphne are potential customers interested in commissioning Joss to undertake a market survey and compile the findings in a report.Iris is willing to pay $500 for the service while Daphne is willing to pay $800.Suppose that the opportunity cost of Joss's time is $1200.Assume that Iris and Daphne do not know each other.If the price is $500 per copy,

Figure 9-12 Figure 9-12 shows the cost and demand curves for the ETSA. -Refer to Figure 9-12.ETSA Power is a natural monopoly because

Relative to a perfectly competitive market,a monopoly results in

Which of the following is necessary in order for a firm to successfully practice price discrimination?

The demand curve for the monopoly's product is

Figure 9-4 Figure 9-4 shows the demand and cost curves for a monopolist. -Refer to Figure 9-4.What is the profit-maximising/loss-minimising output level?