Exam 12: Pure Monopoly

Total Output Price Marginal Revenue Average Total Cost Marginal Cost 1 $100 $100 $100.00 $30 2 90 80 63.00 26 3 80 60 52.67 32 4 70 40 49.50 40 5 60 20 49.60 50 6 50 0 50.00 52 7 40 -20 52.29 66 8 30 -40 55.75 80 9 20 -60 60.67 100 10 10 -80 67.60 130 Refer to the data for a nondiscriminating monopolist.At its profit-maximizing output, this firm's price will exceed its marginal cost by and its average total cost by .

Suppose that a pure monopolist can sell 20 units of output at $10 per unit and 21 units at $9.75 per unit.The marginal revenue of the 21st unit of output is

A monopolist will avoid setting a price in the elastic segment of the demand curve and prefer to set the price in the inelastic segment.

At the profit-maximizing level of output for a monopolist,

If the XYZ Company can sell 4 units per week at $10 per unit and 5 units per week at $9 per unit, the marginal revenue of the fifth unit is $5.

A single-price monopoly is economically inefficient because, at the profit-maximizing output,

The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units.This explains why

The monopolist's demand curve is more elastic than the industry demand curve.

At its profit-maximizing output, the nondiscriminating pure monopolist whose information is in the accompanying table

(Consider This) Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands.Which of the following conditions of price discrimination explains why this occurs?

Which of the following is characteristic of a pure monopolist's demand curve?

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

The supply curve for a monopolist is the upward-sloping portion of the marginal cost curve that lies above the average variable cost curve.

The MR = MC rule

A nondiscriminating monopolist will find that marginal revenue

The gains to monopolists from exercising market power

For a pure monopolist, the relationship between total revenue and marginal revenue is such that

Price discrimination will result in consumers with more elastic demand purchasing more of the good than when a single price is charged to all consumers in the market.

A nondiscriminating profit-maximizing monopolist

At the inelastic portion of a monopolist's demand curve, the marginal revenue of each extra unit of output is positive.