question
A profit-maximizing firm should shut down in the short run if the average revenue it receives is less than
answer
average variable cost.
question
Which of the following is a characteristic of pure monopoly?
answer
barriers to entry
question
(Consider This) Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. Which of the following conditions of price discrimination explains why this occurs?
answer
The items can be bought by people in the low-price group and transferred to members of the high-price group.
question
Many people believe that monopolies charge any price they want to without affecting sales. In fact, the output and sales level for a profit-maximizing monopoly is codetermined with price where
answer
marginal cost = marginal revenue.
question
The nondiscriminating monopolist's demand curve
answer
is less elastic than a purely competitive firm's demand curve.
question
An important economic problem associated with pure monopoly is that, at the profit-maximizing outputs, resources are
answer
underallocated because price exceeds marginal cost.
question
Possible reasons for X-inefficiency include the following, except...
a. costs of materials rising due to tight supply conditions.
b. workers being poorly motivated or poorly supervised.
c. managers having other goals besides maximizing profits.
d. the firm being lethargic due to the absence of competition.
a. costs of materials rising due to tight supply conditions.
b. workers being poorly motivated or poorly supervised.
c. managers having other goals besides maximizing profits.
d. the firm being lethargic due to the absence of competition.
answer
a. costs of materials rising due to tight supply conditions.
question
Socially _________________ price is the price of a product that results in the most efficient allocation of an economy's resources and that is = MC of the product.
answer
optimal
question
Price _________________ is the selling of product to different buyers at different prices when the price differences are not justified by differences in cost.
answer
discrimination
question
Anything that artificially prevents the entry of firms into an industry is called _____________ to entry.
answer
barriers
question
Rent -_____________________ behavior occurs when the actions by persons, firms or unions to gain special benefits from government at the taxpayers' expense.
answer
seeking
question
______________ effects lead to increases in the value of a good to each new and existing users as the total number of users increases.
answer
network
question
The price of a product that enables its producer to obtain a normal profit and = ATC of producing it is called fair-return ________________ .
answer
price
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