Exam 13: Monopoly

If an industry is a natural monopoly and regulators decide that the firm must price at marginal cost, then consumers will be ________ off than if the firm was unregulated and the firm's owners will be ________ off than if it was unregulated.

A single-price monopoly

With competitive rent seeking under monopoly,

If a natural monopoly is allowed to set its price above its average total cost, then

Monopolies can earn an economic profit in the long run because of

A regulated monopoly facing average cost pricing rule will make the same profit as a firm in ________ market does in the long run.

Which of the following statements regarding perfect price discrimination is FALSE?

-For the monopoly shown in the figure above, the profit maximizing price is ________ per unit.

-The monopoly illustrated in the figure above is unregulated and charges a single price. The deadweight loss created by the monopoly is

If a decrease in price decreases total revenue, then

-The table above shows the demand and costs for a single-price monopolist. When it maximizes its profit, the firm makes an economic profit of

In the long run, a single-price monopolist will

For a monopolist, on the inelastic range of its demand,

If the demand is ________, a fall in price ________ total revenue.

-The figure above shows the costs and demand curves for the Bigshow Cable Company. If the regulator of Bigshow Cable Company set its price at $4, the company would

-Adele's Springs produces a unique mineral water. The firm faces the demand schedule shown in the first table above and has the cost schedule shown in the second table above. a) Calculate Adele's marginal revenue schedule. In a figure, draw the demand curve and the marginal revenue curve. b) Calculate Adele's marginal cost and average total cost schedules. In the same figure that you drew the demand and marginal revenue curves, draw the marginal and the average total cost curves. c) What are Adele's profit-maximizing output and price? What is Adele's economic profit? Explain your answer. d) Does Adele's Springs use resources efficiently? Explain your answer.

-If an average cost pricing rule is imposed on the firm in the figure above, the deadweight loss will be

A price discriminating monopolist charges lower prices to customers with

-In the above figure, if the market was a single-price monopoly rather than perfectly competitive, which area shows the transfer of consumer surplus from consumers to producers?

-In the above figure, which area is the deadweight loss from a single-price monopoly?