Exam 15: Monopoly

A monopolist faces the following demand curve: The monopolist has fixed costs of $1,000 and has a constant marginal cost of $2 per unit. If the monopolist were able to perfectly price discriminate, how many units would it sell?

Price discrimination adds to social welfare in the form of

Figure 15-25 -Refer to Figure 15-25. If a regulator requires this firm to charge a socially optimal price, how much deadweight loss results?

Movie theatres charge different prices to different groups of people based on the differing marginal costs that exist from group to group.

Figure 15-25 -Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will charge?

A profit-maximizing monopolist charges a price of $12. The intersection of the marginal revenue and marginal cost curves occurs where output is 10 units and marginal cost is $6. Average total cost for 10 units of output is $5. What is the monopolist's profit?

Which of the following is not a characteristic of a monopoly?

Customers who purchase an audio CD from Sally's Sounds are charged 20% more than customers who purchase the audio CD from the Sally's Sounds website. This is an example of

When a certain monopoly sets its price at $8 it sells 64 units. When the monopoly sets its price at $10 it sells 60 units. The marginal revenue for the firm over this range is

Figure 15-1 -Refer to Figure 15-1. The shape of the average total cost curve in the figure suggests an opportunity for a profit- maximizing monopolist to take advantage of

Which of the following is not an example of price discrimination by a firm?

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. The monopolist will not produce

Figure 15-16 -Refer to Figure 15-16. Which triangle represents the monopoly deadweight loss?

A monopoly firm can sell 150 units of output for $10 per unit. Alternatively, it can sell 151 units of output for $9.98 per unit. The marginal revenue of the 151st unit of output is

The marginal revenue curve for a monopoly firm starts at the same point on the vertical axis as the

Scenario 15-11 Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day. -Refer to Scenario 15-11. One of Vincent's friends tells him he would be more profitable if he charged a single price of $18. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $18?

A monopoly creates a deadweight loss to society because it earns both short-run and long-run positive economic profits.

If government regulation sets the maximum price for a natural monopoly equal to its marginal cost, then the natural monopolist will

Figure 15-4 -Refer to Figure 15-4. The marginal revenue curve for a monopoly firm is depicted by curve

A natural monopolist's ability to price its product is