Exam 13: Monopoly

Use the following to answer questions: Figure: Water Works -(Figure: Water Works) Look at the figure Water Works, which describes a small town's water works, a natural monopoly. If regulators want to maximize efficiency, the monopolist will be allowed to charge a price of:

Use the following to answer questions: -(Table: Lunch) Look at the figure Lunch. Joe makes and sells picnic lunches to people taking all-day rafting trips on the river. The marginal cost and average cost of each lunch are a constant $4. If Joe is a monopolist, what is deadweight loss in the long run?

Price discrimination can occur in all of the following market structures EXCEPT:

Use the following to answer questions: Figure: Monopoly Model -(Figure: Monopoly Model) Look at the figure Monopoly Model. The profit-maximizing quantity is at point:

The large barriers to entry are a reason a monopoly:

Airlines that engage in price discrimination charge lower prices to vacation travelers because their _____ is more _____ than that of other travelers.

Producer surplus in monopoly is smaller than in perfect competition.

The demand curve facing a monopolist is:

Which of the following is NOT an example of price discrimination?

The demand curve for a monopoly is:

When a monopolist practices price discrimination as opposed to setting a single price, deadweight loss decreases.

A natural monopoly has small fixed costs, which allows it to produce at lower cost than potential competitors.

The practice of selling the same product at different prices to different consumers, without corresponding differences in costs, is:

Use the following to answer questions: Scenario: Monopolist The demand curve for a monopolist is P = 75 - 0.5Q, and the monopolist has the following MC expressed as P = 2Q. Assume also that ATC at the profit-maximizing level of production is equal to $12.50. -(Scenario: Monopolist) Look at the scenario Monopolist. The total profit-maximizing level of profit per unit is:

Use the following to answer question: -(Table: Prices and Demand) Look at the table Prices and Demand. Professor Dumbledore has a monopoly on magic hats. The marginal cost of producing a hat is $18. Suppose Dumbledore can perfectly price-discriminate. How many hats will he produce?

Use the following to answer questions: Figure: The Monopolist -(Figure: The Monopolist) Look at the figure The Monopolist. If this monopolist were forced to act like a perfect competitor, it would produce _____ units and sell at _____.

If a firm faces a downward-sloping demand curve, it will ensure that:

A statement that best reflects an evaluation of monopoly firms is that:

A monopolist responds to an increase in demand by _____ price and _____ output.

Use the following to answer questions: -(Table: Demand for Lenny's Coffee) Look at the table Demand for Lenny's Coffee. Lenny's Café is the only source of coffee for hundreds of miles in any direction. If Lenny's marginal cost of selling coffee is a constant $2 and the government forces Lenny to charge a price that eliminates deadweight loss, Lenny will charge _____ per cup and sell _____ cups.