5 Written questions
5 Matching questions
- Are monopolys efficient?
- A monopoly like perfect competition mazimizes profits at a point where MR=MC? T or F
- What is price descrimination?
- No resale:
- At what point on demand curve is fair market price for a monopoly?
- a Selling the same product to different buyers at different prices (ex: discounts for the elderly)
- b True
- c Original purchaser cannot resale product because their is no market for it:resale is impossible
- d NO, because the monopoly will produce less so they can charge a higher price.
- e Where P=ATC on Demand curve
5 Multiple choice questions
- At any point UP TO where MR=MC...P will always be above MC in a monoply
- Straight up from output to Demand curve. Draw a line to price and you have the profit maximizing price.
- The price will rise.
- Company is generating economic profits
5 True/False questions
Assume that a perfectly competive firm that produces widgets is in long-run equilibrium. Then suddenly the market demand for widgets increases. The firm will → not earn an economic profit but be allocatively efficient and productively efficient
Is selling cheaper in bulk a price discrimination? → Selling the same product to different buyers at different prices (ex: discounts for the elderly)
A firm that is producing at the lowest possible average cost is always: → To reduce costs.
Why does a monopoly continue to make profits in the long run while an industry in perfect competition cannot? → Increases income inequality
In a perfectly competitive mkt. if TR=TC what is happening? → Zero economic profits (normal rate of return) this is where MR=MC