Econ Ch15 - Monopoly

Some government grants of monopoly power are

desirable if they

• curtail (縮減) the adverse effects of cut-throat

  competition.

• save consumers from having to choose among

  alternative suppliers.

• make industries more profitable.

• provide incentives for invention and artistic

  creation.

A firm is a natural monopoly if it exhibits _________

as its output increases.

• increasing total revenue

• increasing marginal cost

• increasing return to scale

• decreasing average fixed cost

For a profit-maximizing monopoly that charges a

single price, what is the relationship between price

P, marginal revenue MR, and marginal cost MC?

• P > MR and MR > MC.

• P = MR and MR > MC.

• P > MR and MR = MC.

• P = MR and MR = MC.

If a monopoly’s fixed costs increase, its price will

_________ and its profit will _________.

• increase; decrease

• decrease; increase

• increase; stay the same

• stay the same; decrease

Compared to the social optimum, a monopoly firm

chooses

• a quantity that is too low and a price that is

  too high.

• a quantity that is too high and a price that is

  too low.

• a quantity and a price that are both too low.

• a quantity and a price that are both too high.

The deadweight loss from monopoly arises because

• some potential consumers who forgo buying the

  good value it more than its marginal cost.

• the monopoly firm chooses a quantity that fails

  to equate price and average revenue.

• the monopoly firm makes higher profits than a

  competitive firm would.

• consumers who buy the good have to pay more

  than marginal cost, reducing their consumer

  surplus.

Price discrimination by a monopolist refers to

charging different prices based on

• the consumer’s racial or ethnic group.

• the consumer's willingness to pay.

• the cost of producing the good for a particular

  consumer.

• whether the consumer is likely to become a

  repeat buyer.

When a monopolist switches from charging a single

price to practicing perfect price discrimination, it

reduces

• total surplus.

• the quantity produced.

• the firm’s profit.

• consumer surplus.

If regulators impose marginal-cost pricing on a

natural monopoly, a possible problem is that

• consumers will buy more of the good than is

  efficient.

• consumers will buy less of the good than is

  efficient.

• the firm will make excessive profits.

• the firm will lose money and exit the market.