5 Written questions
4 Matching questions
- Are coupons price discriminators?
- Does a monopoly set price to maximize profit?
- Is a natural monopoly illegal?
- Does a monopoly firm always earn an economic profit?
- a NO they do not
- b Yes
- c No
- d Yes they do
5 Multiple choice questions
- In perfect competition if profits are being made other firms will enter the industry bringing prices down. In a monoply no new firms can enter due to barriers, therefore the monoply will continue to make profits.
- TR - TC or (P- ATC) xQ
- earning profits, generating losses, breaking even.
- It is above the MR curve and is the SAME as the demand curve because the firm and the industry are one.
- Where marginal revenue is equal to marginal costs.
5 True/False questions
WHo had/has a monopoly on diamonds? → De Beers
Why are pure monoplies a rarity? → Few goods and services rarely have only one producer
What does the U.S. Postal service have a monopoly on? → delivery of first-class mail
When does a natural monopoly exist? → Whne a large firm can produce a product at a lower per unit cost than can a smaller firm.
Where is profit maximizing price in a monopoly? → It is at the point where marginal revenue equals marginal cost (MR=MC) pg. 208)