Exam 8: Technology, production, and Costs

Draw a graph that shows producer surplus,consumer surplus,and deadweight loss in a market where the seller practices perfect price discrimination.Be sure to identify the demand curve,the marginal revenue curve,the marginal cost curve,and the profit-maximising quantity on the graph.

A natural monopoly is most likely to occur in which of the following industries?

The demand curve for a monopoly firm

Which of the following is a reason why a firm would not engage in price discrimination?

Figure 8-14 -Refer to Figure 8-14 to answer the following questions. a.What quantity will this monopoly produce and what price will it charge? b.Suppose the monopoly is regulated.If the regulatory agency wants to achieve economic efficiency,what price should it require the monopoly to charge? c.To achieve economic efficiency,what quantity will the regulated monopoly produce? d.Will the regulated monopoly make a profit if it charges the price that will achieve economic efficiency? e.Suppose the government decides to regulate the monopoly by imposing a price ceiling of $35.What quantity will the monopoly produce and what price will the monopoly charge? f.With the price ceiling of $35,what profit will the monopoly earn?

If a monopolist's price is $50 at the output where marginal revenue equals marginal cost and average total cost is $43,then the average profit is $7.

Which of the following is a reason why airline yield management is an effective method to increase revenue?

Assume that a monopolist practices perfect price discrimination.The firm's marginal revenue curve will

Suppose a monopoly is producing its profit-maximising output level.Now suppose the government imposes a lump-sum tax on the monopoly,independent of its output.As a result,the monopoly's profit will fall.

Compared to perfect competition,the consumer surplus in a monopoly

Are restaurant discount vouchers a form of price discrimination? Why or why not?

Explain why the monopolist has no supply curve?

Table 8-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 8-1. -Refer to Table 8-1.What is the marginal revenue from the sale of the 12th unit?

What is perfect price discrimination and why do economists believe that no firm is able to practice perfect price discrimination?

Table 8-3 Julie plans to start a pet-sitting service. She surveyed her neighbourhood to determine the demand for this service. Assume that each person surveyed demands only one hour of pet sitting services per period. Table 8-3 above shows a portion of her survey results. -Refer to Table 8-3.Suppose Julie's marginal cost of providing this service is constant at $7 and she charges $7.What is the value of the consumer surplus enjoyed by her customers?

Which one of the following is not a possible barrier to entry high enough to keep competing firms out of a monopoly industry?

Some consumer electronic products such as plasma TVs,DVD players and digital cameras are introduced at very high prices but,over time,their prices start falling (beyond what could be attributed to falling costs as companies take advantage of economies of scale and cheaper technologies).Which of the following is the best explanation for this observation?

A monopolist faces

What is the relationship between marginal revenue and average revenue for a monopolist and is it the same for a perfect competitor?

Figure 8-6 Figure 8-6 shows the cost and demand curves for a monopolist. -Refer to Figure 8-6.The monopolist's total revenue is