Upgrade to remove ads
Only $35.99/year

micro econ test 4- chapter 15

Terms in this set (29)

can influence the market quantity and price.
Monopolies
an exclusive right to an inventor of a product.
a patent grants
Monopolies have no barriers to entry or exit.
Which of the following statements about a monopoly is FALSE?
demand curve
For a monopoly, the industry demand curve is the firm's
inelastic range of its demand curve.
A monopoly firm expands its output and lowers its price. The firm finds that its total revenue falls. Hence, the firm is producing in the
MR=MC
To its maximize profit, the monopolist produces on the elastic portion of its demand where ____
barriers to entry prevent competing firms from entering the market.
Monopolies can earn an economic profit in the long run because of
restricts output
The fundamental reason a single-price monopoly creates a deadweight loss is that it
decreases consumer surplus and increases the firm's profit.
Price discrimination by a monopoly
is a price maker
A firm that has the ability to control to some degree the price of the product it sells
a firm's long-run average cost curve must exhibit economies of scale throughout the relevant range of market demand.
For a natural monopoly to exist,
have economies of scale that are so large that it can supply the entire market at a lower cost than two or more firms.
To be a natural monopoly, a firm must
area P1P2EF
Refer to Figure 15-10. Compared to a perfectly competitive market, consumer surplus is lower in a monopoly by an amount equal to the
940 units
Refer to Figure 15-9. What is the economically efficient output level?
P2 Q3
Refer to Figure 15-15. If the government regulates Erickson Power Company so that the firm can earn a normal profit, the price would be set at ________ and the output level is ________.
equal to average total cost where it intersects the demand curve.
In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price
$68
Refer to Figure 15-3. Suppose the monopolist represented in the diagram above produces positive output. What is the price charged at the profit-maximizing/loss-minimizing output level?
Q2
Refer to Figure 15-2. To maximize profit, the firm will produce at output level
$4
Refer to Table 15-3. If Comcast maximizes its profits how much profit will it earn?
Monopoly
A firm that is the only seller of a good or service that does not have a close substitute is called
is a government designation that a private firm is the only legal producer of a good or service.
A public franchise
gives a firm the exclusive right to a new product for 20 years from the date the patent application is filed with the government.
a patent
output = 83; price = $22.
Refer to Figure 15-12. If this industry was organized as a perfectly competitive industry, the market output and market price would be
found where the​ profit-maximizing quantity hits the demand curve.
The most profitable price for a monopolist is
$88
Refer to Figure 15-17. You are a member of a student government and are asked to recommend a price for the course and you argue: "I think the college should charge a price so that it just breaks even on the course." What price should you recommend?
Q2 units
Refer to Figure 15-15. The firm would maximize profit by producing
marginal revenue is equal to marginal cost.
To maximize profit a monopolist will produce where
the monopoly must lower its price to sell more of its product
Because a monopoly's demand curve is the same as the market demand curve for its product,
$350
Refer to Table 15-1. When producing the profit-maximizing output, what is the amount of the firm's profit?
Other sets by this creator