Exam 13: Monopoly

-The table above gives the demand schedule for water bottled by Wanda's Healthy Waters. If the marginal cost is a constant $4 a bottle, Wanda's will produce ________ a day and charge ________ a bottle.

Why can a monopoly make an economic profit in the long run?

-Roxie's Movie Theatre is the only one in town. The table above gives the demand schedule for movies. If Roxie's is a single-price monopoly and the marginal cost of a movie is $6, Roxie's will charge ________ a movie and will sell ________ movie tickets a week.

-The figure above shows the demand and cost curves for a single-price monopoly. What level of output maximizes the firm's economic profit?

-In the above figure, a single-price monopolist charges a price of ________, resulting in total revenue equal to area ________.

For a natural monopoly, if price is set equal to marginal cost then the firm incurs an economic loss.

Which of the following types of economic regulation is more likely to encourage firms to inflate their costs?

-In the market depicted in the above figure, if a single-price monopoly maximizes its profit, which area shows the consumer surplus?

Gene's Car Wash is a natural monopoly. To wash 100 cars a week, if Gene is unregulated, he would charge a price of $10. Gene's long-run average cost for washing 100 cars is $8, his average variable cost is $6, and his marginal cost is constant at $4. If Gene was regulated using a marginal cost pricing rule, the price he would be allowed to charge to wash 100 cars is

In order to be able to price discriminate and maximize profit, a monopolist must be able to do all of the following EXCEPT

What is a legal barrier to entry?

A single-price monopolist will produce at the point where

For a single-price monopolist that is maximizing profit, the price is

What is a natural monopoly?

What is the relationship between price, marginal revenue, and marginal cost when a single-price monopoly is maximizing profit?

The United States Mint is the only legal entity to produce circulating coinage for the United States. Michael Jackson's estate owns the copyrights to many of the Beatles songs. Xcel Energy is a public utility company who is the sole provider of electricity and natural gas in some states such as Colorado, New Mexico and Minnesota. Which of these entities, if any, is a natural monopoly?

-In the above figure, if the natural monopoly is regulated using a marginal cost pricing rule, then the firm will

-The single-price monopolist shown in the above figure could increase its economic profit if

-Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 35th haircut?

If the local cable TV company is a natural monopoly and required by regulators to set its price equal to marginal cost, it makes zero profit and produces the efficient level of output.