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Exam 9: Monopoly Markets

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Question 111

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A public franchise

A) is a corporation that is owned by stockholders.
B) results from ownership of a key raw material.
C) is a government designation that a private firm is the only legal producer of a good or service.
D) is an unregulated monopoly necessary for the public good.

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Question 112

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Assume that a monopolist practices perfect price discrimination.The firm will produce an output rate

A) that is less than the efficient level of output.
B) that is greater than the efficient level of output.
C) that is equal to the efficient level of output.
D) that converts consumer surplus into a deadweight loss.

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Question 113

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How does a network externality serve as a barrier to entry? Is this barrier surmountable? Explain. __________________________________________________________________________________________________________________________________________________________________________________________

Table 9.1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 9.1. -Refer to Table 9.1.The amount of the firm's profit is

What is a monopoly? Can a firm be a monopoly if close substitutes for its product exists? __________________________________________________________________________________________________________________________________________________________________________________________

Table 9.3 Julie plans to start a pet-sitting service.She surveyed her neighbourhood to determine the demand for this service.Assume that each person surveyed demands only one hour of pet sitting services per period.Table 9.3 above shows a portion of her survey results. -Refer to Table 9.3.If Julie charges $10 per hour, what is the value of the consumer surplus received by Dawn?

Consider the following pricing strategies: a.perfect price discrimination b.charging different prices to different groups of customers c.optimal two-part tariff d.single-price monopoly pricing Which of the pricing strategies allows a producer to capture the entire consumer surplus that would have gone to consumers under perfect competitive pricing?

Figure 9.10 -Refer to Figure 9.10.What is the area that represents the deadweight loss?

Figure 9.13 Figure 9.13 shows the market demand and cost curves facing a natural monopoly. -Refer to figure 9.13.In the absence of any government regulation, the profit-maximising owners of this firm will produce ________ units and charge a price of ________.

Figure 9.11 Figure 9.11 shows the cost and demand curves for a monopolist. -Refer to Figure 9.11.What is the amount of consumer surplus if, instead of monopoly, the industry was organised as a perfectly competitive industry?

A monopoly is a firm that is the only seller of a good or service that does not have

Figure 9.13 Figure 9.13 shows the market demand and cost curves facing a natural monopoly. -Refer to Figure 9.13.Which of the following would be true if government regulators require the natural monopoly to produce at the economically efficient output level?

The ability of a firm to charge a price greater than marginal cost is called

The airline industry routinely engages in price discrimination across time.

To what does the term 'early adopters' refer?

Figure 9.4 Figure 9.4 shows the demand and cost curves for a monopolist. -Refer to Figure 9.4.The profit-maximising/loss-minimising output level is

To have a monopoly in an industry there must be

Figure 9.13 Figure 9.13 shows the market demand and cost curves facing a natural monopoly. -Refer to Figure 9.13.Suppose the government regulates this industry in order to remove the inefficiency implied by the behaviour of the profit-maximising owners.If regulators require that the firm produces the economically efficient output level, what is this level and what price will be charged?

Insurance companies typically charge women lower prices than men for automobile insurance.Is this an example of price discrimination?

Many universities practice yield management to maximise the revenue they receive from tuition and