Exam 15: Monopoly

Scenario 15-9 Suppose executives at an art museum know that 100 adults are willing to pay $12 for admission to the museum on a weekday. Suppose the executives also know that 200 students are willing to pay $8 for admission on a weekday. The cost of operating the museum on a weekday is $2,000. -Refer to Scenario 15-9. How much additional profit will the museum earn if it engages in price discrimination compared to charging each customer $8 for admission?

Which of the following statements is not correct?

Which of the following statements is correct?

Goods that do not have close substitutes have downward-sloping demand curves.

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. What is Vincent's cost of serving all passengers demanding a tour on a typical day?

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

In the market for "home heating" consumers typically have several options (e.g., electricity, heating fuel, natural gas, propane, etc.), yet we often think of firms in this industry as behaving like monopolists. Discuss the context in which your electricity provider is a monopolist. Is this characterization universally applicable? Explain your answer.

Which of the following is not a difference between monopolies and perfectly competitive markets?

Table 15-19 A monopolist faces the following demand curve: -Refer to Table 15-19. If a monopolist faces a constant marginal cost of $3, how much output should the firm produce?

A profit-maximizing monopolist charges a price of $14. The intersection of the marginal revenue curve and the marginal cost curve occurs where output is 15 units and marginal cost is $7. What is the monopolist's profit?

Monopoly firms have

Table 15-4 A monopolist faces the following demand curve: -Refer to Table 15-4. If the monopolist produces 10 units, what is its marginal revenue?

Figure 15-7 -Refer to Figure 15-7. A profit-maximizing monopolist would earn total revenues of

When there are economies of scale over the relevant range of output for a monopoly, the monopoly

A monopoly creates a deadweight loss to society because it produces less output than the socially efficient level.

Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often

The George Stigler quote, "...the degree of 'market failure' for the American economy is much smaller than the 'political failure' arising from the imperfections of economic policies ..." illustrates the advantage of which type of public policy toward monopolies?