MicroEcon Chapter 12 – Flashcards

"No firm is completely sheltered from rivals; all firms compete for consumer dollars. If that is so, then pure monopoly does not exist." A monopoly is more likely to persist if the cross price elasticity of demand is

Which of the following is not a major barrier to entry into an industry? Which of the following is true?

The demand curve faced by a purely monopolistic seller

The demand curve facing a

The pure monopolist's demand curve is not

Assume that a pure monopolist and a purely competitive firm have the same unit costs. In this case, determine what is true with respect to (a) price, (b) output, and (c) profits. Which of the combinations above are accurate?

Assume that a pure monopolist and a purely competitive firm have the same unit costs. In this case, resources will be allocated

Even though both monopolists and competitive firms follow the MC = MR rule in maximizing profits, there are differences in the economic outcomes because the

The costs of a purely competitive firm and a monopoly could be different because

If a monopoly can experience economies of scale,

Indicate whether the statement is true or false a. Because they can control product price, monopolists are always assured of profitable production by simply charging the highest price consumers will pay. b. The pure monopolist seeks the output that will yield the greatest per-unit profit. c. An excess of price over marginal cost is the market's way of signaling the need for more production of a good. d. The more profitable a firm, the greater its monopoly power. e. The monopolist has a pricing policy; the competitive producer does not. f. With respect to resource allocation, the interests of the seller and of society coincide in a purely competitive market but conflict in a monopolized market.

Assume a monopolistic publisher agrees to pay an author 15 percent of the total revenue from text sales. Which of the following statements is true?

U.S. pharmaceutical companies charge different prices for prescription drugs to buyers in different nations, depending on elasticity of demand and government-imposed price ceilings. U.S. pharmaceutical companies, for profit reasons, oppose laws allowing re-importation of drugs to the United States because re importation would

It has been proposed that natural monopolists should be allowed to determine their profit-maximizing outputs and prices and then government should tax their profits away and distribute them to consumers in proportion to their purchases from the monopoly. This proposal

Which of the following could explain why a firm is a monopoly?

How often do perfectly competitive firms engage in price discrimination?

The MR curve of a perfectly competitive firm is horizontal. The MR curve of a monopoly firm is:

Suppose that a monopolist can segregate his buyers into two different groups to which he can charge two different prices. In order to maximize profit, the monopolist should charge a higher price to the group that has:

The socially optimal price (P = MC) is socially optimal because:

The main problem with imposing the socially optimal price (P = MC) on a monopoly is that the socially optimal price: