ECON #12 - Assignment Essays %

question

One of the economic effects of monopoly is an income transfer from consumers to the firm.

answer

True

question

Assuming no change in product demand, a pure monopolist

answer

must lower price to increase sales

question

An argument for making regulated monopolies adopt marginal-cost pricing is that this would

answer

Make the marginal cost equal to society's valuation of the marginal benefit

question

Any activity designed to transfer income or wealth to a particular individual or firm at society's expense is called

answer

rent-seeking

question

Confronted with the same unit cost data, a monopolistic producer will charge

answer

a higher price and produce a smaller output than a competitive firm

question

The practice of price discrimination is associated with pure monopoly because

answer

monopolists have considerable ability to control output and price

question

If a nondiscriminating imperfectly competitive firm is selling its 100th unit of output for $35, its marginal revenue

answer

will be less than $35

question

Which of the following is not a possible source of natural monopoly?

answer

Rent seeking behavior

question

price discrimination is

answer

only illegal if used to lessen or eliminate competition.

question

In order to maximize profits, the monopolist will produce the output level where MR = MC and charge a price equal to MR and MC.

answer

False

question

For a monopolist, maximum profits will occur when the gap between average revenue (or price) and average cost is biggest.

answer

False

question

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a nondiscriminating monopolist.

answer

false

question

Even though many ballparks practice price discrimination between adults and children in selling tickets, such discrimination is not applied at the concession stands because

answer

there can be exchange of the product from children, who'd buy it at a lower price, to adults

question

The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains why

answer

marginal revenue is less than average revenue

1 of 14

question

One of the economic effects of monopoly is an income transfer from consumers to the firm.

answer

True

question

Assuming no change in product demand, a pure monopolist

answer

must lower price to increase sales

question

An argument for making regulated monopolies adopt marginal-cost pricing is that this would

answer

Make the marginal cost equal to society's valuation of the marginal benefit

question

Any activity designed to transfer income or wealth to a particular individual or firm at society's expense is called

answer

rent-seeking

question

Confronted with the same unit cost data, a monopolistic producer will charge

answer

a higher price and produce a smaller output than a competitive firm

question

The practice of price discrimination is associated with pure monopoly because

answer

monopolists have considerable ability to control output and price

question

If a nondiscriminating imperfectly competitive firm is selling its 100th unit of output for $35, its marginal revenue

answer

will be less than $35

question

Which of the following is not a possible source of natural monopoly?

answer

Rent seeking behavior

question

price discrimination is

answer

only illegal if used to lessen or eliminate competition.

question

In order to maximize profits, the monopolist will produce the output level where MR = MC and charge a price equal to MR and MC.

answer

False

question

For a monopolist, maximum profits will occur when the gap between average revenue (or price) and average cost is biggest.

answer

False

question

In most cases, a monopolist practicing price discrimination will end up earning less economic profits than a nondiscriminating monopolist.

answer

false

question

Even though many ballparks practice price discrimination between adults and children in selling tickets, such discrimination is not applied at the concession stands because

answer

there can be exchange of the product from children, who'd buy it at a lower price, to adults

question

The nondiscriminating pure monopolist must decrease price on all units of a product sold in order to sell more units. This explains why

answer

marginal revenue is less than average revenue

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