Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? 

• In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition. 
• In perfect competition there are many firms, but in monopolistic competition there are only a few firms. 
• In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product. 
• In perfect competition there are few consumers, but in monopolistic competition there are many consumers. 

A monopoly can price discriminate between two groups of consumers if each group has

• a large consumer surplus.

• a different willingness to pay.

• the same willingness to pay.

• the ability to resell the good to the other group.

Sue's Surfboards is the sole renter of surfboards on Big Wave Island. Sues demand and marginal revenue curves are illustrated in the figure above. Sue's Surfboards currently rents 15 surfboards an hour. Sue's total revenue from the 15 surfboards is

• $300

• $220

• $150

• $100

For the unregulated, single-price monopoly shown in the figure above, when its profit is maximized, output will be

• 4 units per year and the price will be $6.

• 4 units per year and the price will be $4.

• 6 units per year and the price will be $4.

• None of the above answers is correct.

For this monopolist, what is the area of consumer surplus?

• ABHJ
• AJGC
• ARJ
• ARJE

Total revenue for this monopoly is represented by area:

• 0CGE
• 0AJE
• AJHB
• BAJH

If this monopolist is given a lump-sum subsidy its output would

• increase to M. A lump-sum subsidy shifts the firm's MC curve to the right.

• increase to L. A lump-sum subsidy shifts the firm's MC curve to the left.

• decrease by the amount of the subsidy.

• remain at E. A lump-sum subsidy does not shift the firm's MC curve.

• There is not enough information to answer the question.

Economic profits for this monopoly are represented by area:

• 0CGE
• 0AJE
• AJHB
• BAJN

This monopoly will maximize profits at what price?

• A
• B
• C
• R

A monopolist introduces a technological innovation that lowers the marginal cost and average cost of production. The price of the good and the quantity are most likely to change in which of the following ways? 

• P=Decrease; Q=Increase
• P=Decrease; Q=Decrease
• P=Increase; Q=Increase
• P=Increase; Q=Decrease