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salmonbat888Lv1

11 Dec 2019

The economic inefficiency of a monopolist can be measured by the

A. the number of consumers who are unable to purchase the product because of its high price.
B. the poor quality of service offered by monopoly firms.
C. the excess profit generated by monopoly firms.
D. the deadweight loss.

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Alice SejakeLv10

13 Oct 2020

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Related questions

Which is a major criticism of a monopoly as a source of allocative inefficiency?  

A. A monopolist fails to expand output to the level where the consumers' valuation of an additional unit is just equal to its opportunity cost. 

B. A monopolist has no incentive to produce efficiently because even the inefficient monopolist can be assured of economic profits. 

C. A monopolist will always make profits and that means that prices are too high. 

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redkangaroo5

3. (15 points) Saw Inc. manufactures saw in Warsaw. People never saw a saw that could saw like the saw they saw in Warsaw. So, Saw Inc. gained monopoly power in the saw market over time as all other firms exit the industry. Currently, saws are produced at a constant marginal - average cost of $10 per unit. The demand curve for saw is presented in the figure below. The equilibrium price charged by the monopolist is , the number of saw produced is and economic profit is $ Since the monopolist produces inefficient level of output, the deadweight loss due to monopoly in the saw market is $ You must show your work on the graph. Price ($) #Demand 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 7000 7500 8000 8500 Number of Saws

Question 1

The amount of profit that can be achieved using uniform pricing is __________ the profit that can be achieved from price discrimination because of _______.

Select one:

a. greater than; the cost of trying to determine every single consumer's individual demand (willingness to pay) is prohibitively expensive.

b. less than; uniform pricing is more costly so the ATC and AVC curves are higher than they are under price discrimination.

c. equal to; the TR and TC curves are equivalent under either pricing scheme, so there is no profit advantage to either scheme.

d. less than; total demand includes people who would be willing to pay more than, as well as less than, the uniform market price.

Question 2

A firm selling in two markets is practicing price discrimination:

Select one:

a. when it refuses to sell the good to some group of consumers.

b. anytime it charges different consumers different prices.

c. when it charges the same price to different consumers as long as they differ in their demand for the good.

d. when it is charging different consumers, different prices, and the price difference is not based upon cost differences.

Question 3

To successfully practice price discrimination:

Select one:

a. consumers in two separate markets must have identical demand.

b. the firm must possess market power.

c. it must be easy for consumers in one market to sell to consumers in the other market.

d. the firm must be a pure monopoly.

Question 4

If it could practice first-degree price discrimination, a firm with market power could earn:

Select one:

a. its typical monopoly profit as well as the area which, under uniform pricing, would represent the deadweight loss associated with market power.

b. an area half the size of its monopoly power under uniform pricing.

c. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus.

d. its typical monopoly profit as well as the area which, under uniform pricing, would represent consumer surplus and the deadweight loss associated with market power.