Microeconomics Chapter 9 Flashcards

Where there is only one seller of a product for which no close substitute is available.

A firm that sets the price of its product to maximize profit.

True

<p>Legal barriers, economies of scale (natural monopoly), and control of important inputs.</p> Signup and view all the answers

<p>The law allows only one producer (Franchising, licensing, patents).</p> Signup and view all the answers

<p>A firm can produce at a lower cost than a number of small firms could.</p> Signup and view all the answers

<p>A monopolist controls crucial resources necessary for production.</p> Signup and view all the answers

<p>It is the same as the market demand curve.</p> Signup and view all the answers

<p>The monopolist cannot set both price and quantity, and if the output increases, the price will fall.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>It lies below the demand curve.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>Elasticity varies along a linear demand curve.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>Lower total revenue, and higher total cost.</p> Signup and view all the answers

<p>Marginal Revenue = Marginal Cost.</p> Signup and view all the answers

<p>The price according to the demand for the product, at the profit-maximizing output.</p> Signup and view all the answers

<p>Lost total profits from producing too little.</p> Signup and view all the answers

<p>Lost total profits from producing too much output.</p> Signup and view all the answers

<p>Monopoly power (exclusive right to make the product for 20 years).</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>By comparing price per unit and average total cost at Q*.</p> Signup and view all the answers

<p>If Price &gt; Average Total Cost.</p> Signup and view all the answers

<p>If Price &lt; Average Total Cost.</p> Signup and view all the answers

<ol> <li>It's not fair for monopoly owners to have persistent economic profits. 2. It leads to market inefficiencies. 3. Lack of competition hinders technological advances.</li> </ol> Signup and view all the answers

<p>It promotes smaller output and higher prices (Price &gt; Marginal Cost).</p> Signup and view all the answers

<p>It may lead to greater concentration of economic power, which could hinder innovation.</p> Signup and view all the answers

<ol> <li>Anti-combining laws 2. Government regulation.</li> </ol> Signup and view all the answers

<p>Reduce the abuses of monopoly power and push production closer to social optimum.</p> Signup and view all the answers

<p>It is currently covered by the Competition Act of 1986; business practices that unduly prevent or lessen competition that cover both criminal and civil offences.</p> Signup and view all the answers

<p>Handled by the courts including fixing prices, bid-rigging, and predatory pricing.</p> Signup and view all the answers

<p>Handled by the Competition Tribunal including mergers that lessen competition and abuse of a dominant market position.</p> Signup and view all the answers

<p>Privately owned monopolies may be allowed to operate but are under the regulation of a government agency.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>Sets price equal to average total cost, where the demand curve intersects average total costs.</p> Signup and view all the answers

<p>When producers charge different prices for the same good or service when no cost differences exist.</p> Signup and view all the answers

<p>Monopoly power, market segregation, and no resale.</p> Signup and view all the answers

<p>One firm or a small group that follows identical pricing policies.</p> Signup and view all the answers

<p>The demand curves for markets, groups, or individuals are different.</p> Signup and view all the answers

<p>The person buying at a discount cannot resell the product.</p> Signup and view all the answers

<p>A seller can make more money by charging different buyers different prices.</p> Signup and view all the answers

<p>Sets price equal to marginal cost, where demand intersects marginal cost and achieves allocative efficiency.</p> Signup and view all the answers

<p>The monopolist's demand curve is downward sloping because it is the market demand curve.</p> Signup and view all the answers

<p>Because there is a downward-sloping demand curve.</p> Signup and view all the answers

<p>Along the elastic portion of the demand curve, a fall in price leads to an increase in total revenue, making marginal revenue positive.</p> Signup and view all the answers

<p>The monopolist maximizes profits at that output where marginal revenue equals marginal cost.</p> Signup and view all the answers