A monopoly that price discriminates ________.

A. benefits buyers because it offers the good at a variety of prices

B. gains because it converts consumer surplus to economic profit

C. uses resources more efficiently than would a competitive market

D. enables buyers to maximize their consumer surplus

A single-price monopoly maximizes profit by producing the quantity at which ________.

A. its total revenue will be as large as possible

B. marginal revenue equals marginal cost and setting the price equal to marginal revenue

C. marginal revenue equals marginal cost and setting the price equal to marginal cost

D. marginal revenue equals marginal cost and setting the price equal to the most people are willing to pay for that quantity

Governments regulate natural monopoly by capping the price at ________. A. marginal revenue and allowing the monopoly to maximize profit B. marginal cost so that the monopoly is efficient and makes zero economic profit C. average total cost, which allows the monopoly to be inefficient but make zero economic profit D. the buyers’ willingness to pay, which makes the monopoly operate efficiently

A monopoly sets its price such that demand for the good produced is ________ . A. unit elastic B. inelastic C. elastic D. either elastic or inelastic, but never unit elastic

A monopoly sets its price such that demand for the good produced is ________.

A. unit elastic

B. inelastic

C. elastic

D. either elastic or inelastic, but never unit elastic

A single-price monopoly is ________. A. inefficient because it converts consumer surplus to producer surplus B. inefficient because it produces too small an output and creates a deadweight loss C. efficient because buyers are paying a price equal to their willingness to pay D. efficient because it is the only producer of the good

A monopoly ________. A. can choose its price and output and always has the option of price discriminating B. is a price taker and by offering a range of discounts can price discriminate C. that produces a good that cannot be resold might choose to price discriminate D. book store that offers a discount on Tuesdays is price discriminating

A monopoly ________.

A. can choose its price and output and always has the option of price discriminating

B. is a price taker and by offering a range of discounts can price discriminate

C. that produces a good that cannot be resold might choose to price discriminate

D. book store that offers a discount on Tuesdays is price discriminating

At the shutdown point, the firm ________.

A. incurs an economic loss equal to total variable cost

B. makes zero economic profit

C. incurs a loss equal to total fixed cost

D. stops production to decrease its economic loss

Perfect competition is efficient because all the following conditions hold except ________. A. total product is maximized B. firms maximize profit and produce on their supply curves C. consumers get a real bargain and pay a price below the value of the good D. firms minimize their average total cost of producing the good

A firm is a natural monopoly if ________.

A. it can produce the good at a price below its competitor’s price

B. it can produce a larger quantity of the good than other firms

C. the government grants it a public franchise or patent

D. it can satisfy the market demand at a lower average total cost than other firms

Perfect competition is efficient because all the following conditions hold except ________.

A. total product is maximized

B. firms maximize profit and produce on their supply curves

C. consumers get a real bargain and pay a price below the value of the good

D. firms minimize their average total cost of producing the good

A firm is a natural monopoly if ________. A. it can produce the good at a price below its competitor’s price B. it can produce a larger quantity of the good than other firms could C. the government grants it a public franchise or patent D. it can satisfy the market demand at a lower average total cost than other firms can

A single-price monopoly maximizes profit by producing the quantity at which ________. A. its total revenue will be as large as possible B. marginal revenue equals marginal cost and setting the price equal to marginal revenue C. marginal revenue equals marginal cost and setting the price equal to marginal cost D. marginal revenue equals marginal cost and setting the price equal to the most people are willing to pay for that quantity