Study Question Chapter 10 – Flashcards

For a monopolist, marginal revenue is _______ (greater/less) than price.

A monopoly that cuts its price gains revenue from its _______ customers but loses revenue from its __________ customers.

Arrow up or down: As the quantity produced by a monopolist increases, the gap between the marginal revenue curve and demand curve _________.

To maximize profit, a monopolist picks the quantity at which _______ equals _______.

Arrow up or down: At a price of $18 per CD, the marginal revenue of a CD seller is $12. If the marginal cost of CDs is $9, the firm should _______ its price to ________ the quantity.

A monopoly is inefficient solely because the monopolist gets a profit at the expense of consumers. __________ (true/false).

To show the dead weight loss from monopoly, we compare the monopoly outcome to what would happen under ________.

The dead weight loss from monopoly is shown graphically by the area between the _________ curve and the _________ curve between the _________ quantity and the ________ quantity.

The average cost for providing off-street parking is $30 per space per day, and as a monopolist you could charge $35 per space per day for 200 spaces. The maximum amount that you are willing to pay a monopoly is _________.

A patent increases the incentive to develop new products because it _______ the price of the product and thus generates profit to cover a firm's costs of ________.

In some cases, a patent is socially inefficient because it merely _________; in other cases, a patent is socially beneficial because it ________.

A price-discrimination firm will charge a higher price to consumers with a relatively _________ (elastic/inelastic) demand and a lower price to consumers with a relatively _______ (elastic/inelastic) demand.

The aspirin sold in airports is more expensive than aspirin sold in grocery stores because the demand for aspirin in airports is relatively _______.

A reliable predictor of a consumer's willingness to pay for a movie is the consumption of _________.

Senior citizens pay less than everyone else for admission to a movie, but the same as everyone else for beverages because beverages are ________, while admission is not.

The price of a hardback edition of a best-selling book is typically three times the price of the paperback edition because the demand from the eager consumers who buy hardbacks is relatively _______ (elastic/inelastic).