Select the correct answer:
A (legal; natural) monopoly exists when one firm can meet the entire market demand at a lower average total cost than two or more firms could.
A monopoly that is able to sell different units of a good or service for different prices is a (natural-price; price-discriminating) monopoly.
The act of obtaining special treatment by the government to create an economic profit is called (government surplus; rent seeking).
Regulated firms have an incentive to inflate their costs under (rate of return; price cap) regulation.
The U.S. Postal Service has a (natural; legal) monopoly on first class mail delivery.
A (single-price; price discriminating) monopoly maximizes profit by producing the quantity at which marginal revenue equals marginal cost and then charging the maximum price that consumers are willing to pay for that quantity.
The key idea behind price discrimination is to convert (consumer surplus; producer surplus) into economic profit.
Select the correct answer:
A (legal; natural) monopoly exists when one firm can meet the entire market demand at a lower average total cost than two or more firms could.
A monopoly that is able to sell different units of a good or service for different prices is a (natural-price; price-discriminating) monopoly.
The act of obtaining special treatment by the government to create an economic profit is called (government surplus; rent seeking).
Regulated firms have an incentive to inflate their costs under (rate of return; price cap) regulation.
The U.S. Postal Service has a (natural; legal) monopoly on first class mail delivery.
A (single-price; price discriminating) monopoly maximizes profit by producing the quantity at which marginal revenue equals marginal cost and then charging the maximum price that consumers are willing to pay for that quantity.
The key idea behind price discrimination is to convert (consumer surplus; producer surplus) into economic profit.
Related textbook solutions
Related questions
16. A monopoly will set the price
| Ā | at the highest price along the demand it faces. |
| Ā | equal to the value at which marginal cost intersects the demand curve. |
| Ā | so that it can sell the quantity at which marginal revenue is equal to marginal cost. |
| Ā | so that it can sell the quantity at which marginal revenue is equal to zero. |
17.
A monopolist will always end up choosing to operate
| Ā | even if its profit are negative. |
| Ā | on the elastic portion of the demand it faces. |
| Ā | until such time as a new competitor enters its market. |
| Ā | only if it can capture the entire consumer surplus. |
18.
When first-degree price discrimination is perfectly implemented social gain is maximized, with all gains going to the monopoly.
| Ā | True |
| Ā | False |
19.
Which of the following is the best example of second-degree price discrimination?
| Ā | A car salesman attempts to discover and charge the highest price that the customer is willing to pay. |
| Ā | A sub sandwich shop that gives you a half-price sandwich for every six sandwiches you purchase. |
| Ā | ManufacturersĆ¢ĀĀ use of discount coupons printed in Sunday newspapers. |
| Ā | Polaroid cameras and film. |
20.
Third-degree price discrimination occurs when a monopoly separates its customers into distinct markets, charging a different price to each group.
| Ā | True |
| Ā | False |
