Exam 13: Monopoly

Suppose that a monopoly computer chip maker increases production from 10 microchips to 11 microchips. If the market price declines from $30 per unit to $29 per unit, marginal revenue for the eleventh unit is:

Use the following to answer questions: -(Table: Prices and Demand) Look at the table Prices and Demand. The New Orleans Saints have a monopoly on Saints logo hats. The marginal cost of producing a hat is $18. If the Saints were a perfectly competitive firm in a perfectly competitive industry, their profit-maximizing price and output, respectively, would be:

Use the following to answer questions: -(Table: Prices and Demand) Look at the table Prices and Demand. The New Orleans Saints have a monopoly on Saints logo hats. The marginal cost of producing a hat is $18. If the Saints were a perfectly competitive firm in a perfectly competitive industry, at their profit-maximizing price and output deadweight loss would be:

Use the following to answer questions: Figure: The Profit-Maximizing Output and Price -(Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. At the profit-maximizing output and price for a monopolist, deadweight loss is:

A monopoly's short-run supply curve is its marginal cost curve above the minimum average variable cost.

A monopolist responds to a decrease in demand by _____ price and _____ output.

To practice effective price discrimination, a monopolist must be able to:

Which of the following statements concerning monopoly is TRUE?

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 the water works is unregulated and maximizes profit, how many customers will it serve?

When a monopolist practices price discrimination, producer surplus will be higher than in a single-price monopoly.

When a monopolist practices price discrimination, compared to a single-price monopolist, producer surplus will:

The De Beers company is described as a monopolist in the production of:

Price-discriminating firms will impose a price structure that offers customers with a _____ demand a _____ price and offers customers with a(n) _____ demand a _____ price.

Suppose the price elasticity of demand for coffee at the CoffeeBarn equals 1.71 for women and 0.55 for men. A successful price discrimination strategy would lead to _____ prices for men and _____ prices for women _____.

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 one of many firms in a competitive industry, what price will he charge for a lunch in the long run?

Use the following to answer questions: Figure: Short-Run Monopoly -(Figure: Short-Run Monopoly) Look at the figure Short-Run Monopoly. The profit-maximizing quantity of output is quantity:

Use the following to answer questions: Figure: A Rock Climbing Shoe Monopoly -(Figure: A Rock Climbing Shoe Monopoly) Look at the figure A Rock Climbing Shoe Monopoly. If the firm is regulated such that it earns zero economic profit, the firm will sell _____ pairs of shoes at a price of _____ per pair.

A monopolist who engages in perfect price discrimination charges each consumer a price equal to the consumer's willingness to pay.

Use the following to answer questions: Figure: The Profit-Maximizing Output and Price -(Figure: The Profit-Maximizing Output and Price) Look at the figure The Profit-Maximizing Output and Price. Assume that there are no fixed costs and AC = MC = $200. The monopolist who can use price discrimination perfectly will produce an output of _____ diamonds.

Because tourist demand for airline flights is relatively _____, small _____ in ticket price will result in relatively _____ in additional tourists.