Exam 16: Monopoly

The assumption that regulation relentlessly seeks out deadweight loss and seeks to eliminate it is called the A) social interest theory of regulation. B) capture theory of regulation. C) Coase theory of regulation. D) socially optimal theory of regulation. E) predatory theory of regulation.

If a firm successfully price discriminates,it increases i.consumer surplus. ii.deadweight loss. iii.economic profit.

If a producer wants a monopoly with a legal barrier to entry,how can this be done? i.The producer can spend funds lobbying to attain passage of the legal barrier to entry. ii.The producer can purchase an existing monopoly. iii.The producer can make rent seeking expenditures.

Suppose that along a linear demand curve,the elasticity of demand is equal to 1 when the price is $4 and the quantity is 100 units.Then the

Price discrimination is prevented in situations where

What are a marginal cost pricing rule and an average cost pricing rule? What are the disadvantages and advantages of each?

The figure above shows a natural monopoly regulated using a marginal cost pricing rule. -In the figure above,an

-In the above figure,for a single-price monopoly the consumer surplus is equal to the area

Which of the following is correct for a single-price monopoly? i.The firm can determine the quantity it produces and the price it charges. ii.It would never profitably produce output in the inelastic range of its demand. iii.Its marginal revenue is less than price.

If a monopoly can perfectly price discriminate,then its marginal revenue curve will be

A single-price monopoly is producing at an output level where marginal revenue is $15,marginal cost is $13,and price is $20.This monopoly is

-Which produces more output: a perfectly price discriminating monopoly or a single-price monopoly?

-The figure above shows the demand,marginal revenue,and marginal cost curves for Paul's Parrot pillows,a monopoly producer of pillows stuffed with parrot feathers.When Paul maximizes his profit,Paul produces ________ pillows per hour,and if the market was perfectly competitive,________ pillows per hour would be produced.

Suppose a single-price monopoly sells 3 units of a good at $20 per unit.If the monopoly sells 4 units,the total revenue increases to $72.What price is being charged for 4 units?

Gene's Car Wash is a natural monopoly.To wash 100 cars a week,if Gene is unregulated,he would charge a price of $10.Gene's average total cost for washing 100 cars is $8,his average variable cost is $6,and his marginal cost is $4.If Gene is regulated using a marginal cost pricing rule,the price he is allowed to charge to wash 100 cars is

A monopoly market has

-The table above gives the demand for a monopolist's output.Between which two quantities is marginal revenue equal to 0?

The capture theory of regulation assumes that regulation benefits

A firm that is a natural monopoly

A ________ monopoly sells different units of its good or service for ________.