Monopoly and Price Discrimination Quiz

What is the situation when a firm is the only player in the market with very high barriers to entry?

• Oligopoly

• Monopolistic Competition

• Monopoly

• Perfect Competition

In a monopoly, at what quantity does a profit-maximizing firm produce?

• Where marginal cost is at its minimum

• Where marginal cost is equal to average total cost

• Where marginal cost intersects average total cost

• Where marginal cost intersects marginal revenue

What is the term for charging different customers different rates based on their willingness to pay?

• Price Fixing

• Price Discrimination

• Price Skimming

• Price Transparency

In the extreme scenario of perfect price discrimination, what happens to consumer surplus?

• It increases

• It remains the same

• It decreases

• It disappears

What happens to the economic profit of a monopoly firm when it is able to practice price discrimination?

• It decreases compared to without price discrimination

• It remains the same as without price discrimination

• It becomes zero

• It increases compared to without price discrimination

Which of the following statements is true?

• Pure monopolies have less consumer surplus than price discriminating monopolies

• Price discriminating are allocatively efficient but pure monopolies are not

• Pure monopolies are allocatively efficient but price discriminating monopolies are not

• Perfectly competitive firms tend to earn higher profits than monopolist firms

This graph represents...

• A price discriminating monopoly making positive economic profits

• A price discriminating monopoly making negative economic profits

• A single price monopoly making positive economic profits

• A single price monopoly making negative economic profits

The profit-maximizing quantity for this firm is represented by...

• Q1

• Q2

• Q3

The profit-maximizing price for this firm is represented by...

• P4

• P3

• P2

• P1

Which of the following would happen if this single price monopoly began to perfectly price discriminate? (Choose all that apply)

• The profit maximizing quantity would move from Q1 to Q

• The firm would be producing the allocatively efficient output

• The profit maximizing price would change from P to P1

• Deadweight loss would disappear