Term 2 review

A firm with market power engages in price discrimination to:

• earn a higher profit
  
• increase consumer surplus
  
• decrease deadweight loss
  
• make its demand more elastic 

Revenue maximization level of output is at

• MC = MR

• MC = AR

• MR = 0

• MC = AC

Monopolist can control

• price

• output

• both

• nothing

Total Revenue for this monopoly are represented by area:

• 0CGE
• 0AJE
• AJHB
• BAJN

An example of a monopoly is

• a big city restaurant.

• the stock market.

• the only veterinarian in an isolated farm community.

• PPUM

Which of the following is a characteristic of a monopoly?

• The firm is a price taker.

• Demand is perfectly elastic.

• There are many close substitutes for the firm's product.

• The market price exceeds marginal revenue.

In the monopoly, the firm's marginal revenue curve is ________, while in a perfectly competitive market, each firm's marginal revenue curve is ________.

• downward sloping; horizontal

• horizontal; downward sloping

• upward sloping; horizontal

• downward sloping; upward sloping

In perfect competition, what is the goal of profit maximization?

• Maximize total revenue

• Minimize total cost

• Maximize the difference between total revenue and total cost.

• Maximize market share

What is the main characteristic of a perfectly competitive market?

• Few buyers and sellers, identical products, control over market price

• Many buyers and sellers, differentiated products, control over market price

• Many buyers and sellers, identical products, no control over market price

• Few buyers and sellers, differentiated products, control over market price

What is the main characteristic of a monopoly market?

• Only one seller or producer

• Limited government intervention

• Perfect competition

• Multiple sellers or producers