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Exam 10: Monopoly, cartels, and Price Discrimination

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Question 61

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The diagram below shows the demand curve and marginal cost and marginal revenue curves for a new heart medication for which the pharmaceutical firm holds a 20-year patent on its production and sales.This protection gives the firm monopoly power for the 20 years of the patent. FIGURE 10-6 -Refer to Figure 10-6.Assume this pharmaceutical firm charges a single price for its drug.At its profit-maximizing level of output,it will generate a deadweight loss to society represented by

A) areas H + I.
B) areas H + I + J + K.
C) areas I + J + K.
D) There is no deadweight loss generated.
E) It is not possible to determine with the information provided.

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Question 62

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Your food-services company has been named as the monopoly provider of meals at a small university.The cost and demand schedules are: TABLE 10-2 -Refer to Table 10-2.The marginal cost between 100 and 200 meals per day is

A) $0.
B) $1.00.
C) $1.50.
D) $2.00.
E) $3.00.

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Question 63

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Suppose a monopolist faces the demand curve and cost curves shown below. FIGURE 10-5 -Refer to Figure 10-5.If this single-price monopolist is producing at the profit-maximizing level of output,the total revenue is represented by the area

Which of the following statements describes a major difference between monopoly and perfect competition?

A firm is best described as a natural monopoly if

A single-price monopolist is currently producing an output level where P = $20,MR = $13,ATC = $15,and MC = $14.In order to maximize profits,this monopolist should

Consider the following AR and MR curves for a single-price monopolist. FIGURE 10-2 -Refer to Figure 10-2.The price elasticity of demand at Q₂ is

Your food-services company has been named as the monopoly provider of meals at a small university.The cost and demand schedules are: TABLE 10-2 -Refer to Table 10-2,and suppose that the firm is a single-price monopolist.At the profit-maximizing level of output,the price elasticity of demand is

Your food-services company has been named as the monopoly provider of meals at a small university.The cost and demand schedules are: TABLE 10-2 -Refer to Table 10-2.For a single-price monopolist,the profit-maximizing price and number of meals per day is best approximated by

Suppose that a single-price monopolist knows the following information: The total profit being earned by this firm at the current level of output is ________ which ________ the maximum profit possible.

The diagram below shows the demand curve and marginal cost and marginal revenue curves for a new heart medication for which the pharmaceutical firm holds a 20-year patent on its production and sales.This protection gives the firm monopoly power for the 20 years of the patent. FIGURE 10-6 -Refer to Figure 10-6.Assume this pharmaceutical firm charges a single price for its drug.At its profit-maximizing level of output,it will generate a total profit represented by

A monopolist faces a straight-line demand curve and is currently producing an output level of 2000 units receiving $10 000 in total revenue.At an output of 1000 units the marginal revenue for this firm would be

TABLE 10-1 -Refer to Table 10-1,which displays the demand schedule for a single-price monopolist.At what level of output is total revenue maximized for this firm?

With regard to price discrimination,we can generally say that a monopolist practicing perfect price discrimination ________ a single-price monopolist in the same market.

The cartelization of an industry with a homogeneous product usually means that

Suppose the technology of an industry is such that the typical firm's minimum efficient scale is 8000 units per month at an average long-run cost of $5 per unit.If the total quantity demanded at a price of $5 per unit is 8500 units per month,the likely result would be

For a monopolist,the profit-maximizing level of output occurs where

A single-price monopolist is currently producing an output level where P = $320,MR = $260,ATC = $280,and MC = $200.In order to maximize profits,this monopolist should

TABLE 10-1 -Refer to Table 10-1,which displays the demand schedule for a single-price monopolist.At what level of output is marginal revenue equal to 0?

Consider the following AR and MR curves for a single-price monopolist. FIGURE 10-2 -Refer to Figure 10-2.If marginal costs were zero,the profit-maximizing output for this single-price monopolist would be