econ2001 chap10 T&F

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A firm with monopoly power will always charge a price equal to its marginal cost.

False

The Lerner Index of Monopoly Power is calculated as the difference between price and marginal cost divided by price.

False

Measuring monopoly power only involves qualitative terms.

False

The Lerner Index of Monopoly Power can be expressed in terms of the elasticity of demand facing the firm.

True Signup and view all the answers

A monopolist might supply several different quantities at the same price.

True Signup and view all the answers

In a monopolistic market, there is a one-to-one relationship between price and quantity produced.

False Signup and view all the answers

If the demand curve shifts in a monopoly market, the profit-maximizing output will always change.

False Signup and view all the answers

When a tax of $t$ per unit is levied on a monopolist, the firm's effective marginal cost increases by $t$.

True Signup and view all the answers

In a monopolistic market, if the demand becomes more elastic, the price will always decrease.

False Signup and view all the answers

A monopolist can supply the same quantity at different prices.

True Signup and view all the answers

If a firm's demand is elastic, the markup will be small and the firm will have little monopoly power.

True Signup and view all the answers

A single supermarket can raise its prices significantly without losing customers due to the small elasticity of market demand for food.

False Signup and view all the answers

Small convenience stores typically charge lower prices than supermarkets due to their less price-sensitive customers.

False Signup and view all the answers

In a monopsonistic market, the monopsonist purchases quantity Q*m where marginal expenditure and marginal value intersect.

True Signup and view all the answers

In a competitive market, price and quantity are both lower compared to a monopsonistic market.

False Signup and view all the answers

In a monopoly, average revenue exceeds marginal revenue, leading to a situation where price exceeds marginal cost.

True Signup and view all the answers

A monopsonist purchases up to the point where marginal expenditure intersects average expenditure.

False Signup and view all the answers

Monopsony power depends on the elasticity of demand.

False Signup and view all the answers

When supply is inelastic in a monopsonistic market, the price paid by the monopsonist is close to what it would be in a competitive market.

False Signup and view all the answers

Patent laws protect the monopoly positions of firms that developed unique innovations.

True Signup and view all the answers

Predatory pricing is a practice of pricing to drive future competitors out of business and to discourage new entrants in a market.

True Signup and view all the answers

econ2001 chap10 T&F

Podcast Beta

Questions and Answers

A firm with monopoly power will always charge a price equal to its marginal cost.

The Lerner Index of Monopoly Power is calculated as the difference between price and marginal cost divided by price.

Measuring monopoly power only involves qualitative terms.

The Lerner Index of Monopoly Power can be expressed in terms of the elasticity of demand facing the firm.

A monopolist might supply several different quantities at the same price.

In a monopolistic market, there is a one-to-one relationship between price and quantity produced.

If the demand curve shifts in a monopoly market, the profit-maximizing output will always change.

When a tax of $t$ per unit is levied on a monopolist, the firm's effective marginal cost increases by $t$.

In a monopolistic market, if the demand becomes more elastic, the price will always decrease.

A monopolist can supply the same quantity at different prices.

If a firm's demand is elastic, the markup will be small and the firm will have little monopoly power.

A single supermarket can raise its prices significantly without losing customers due to the small elasticity of market demand for food.

Small convenience stores typically charge lower prices than supermarkets due to their less price-sensitive customers.

In a monopsonistic market, the monopsonist purchases quantity Q*m where marginal expenditure and marginal value intersect.

In a competitive market, price and quantity are both lower compared to a monopsonistic market.

In a monopoly, average revenue exceeds marginal revenue, leading to a situation where price exceeds marginal cost.

A monopsonist purchases up to the point where marginal expenditure intersects average expenditure.

Monopsony power depends on the elasticity of demand.

When supply is inelastic in a monopsonistic market, the price paid by the monopsonist is close to what it would be in a competitive market.

Patent laws protect the monopoly positions of firms that developed unique innovations.

Predatory pricing is a practice of pricing to drive future competitors out of business and to discourage new entrants in a market.

More Quizzes Like This

Pricing Theory and Microeconomics

Price Discrimination in Microeconomics

Microeconomics: Understanding External Factors

Microeconomics Pricing and Supply Patterns

Upgrade to continue

econ2001 chap10 T&amp;F

Podcast Beta

Questions and Answers

A firm with monopoly power will always charge a price equal to its marginal cost.

The Lerner Index of Monopoly Power is calculated as the difference between price and marginal cost divided by price.

Measuring monopoly power only involves qualitative terms.

The Lerner Index of Monopoly Power can be expressed in terms of the elasticity of demand facing the firm.

A monopolist might supply several different quantities at the same price.

In a monopolistic market, there is a one-to-one relationship between price and quantity produced.

If the demand curve shifts in a monopoly market, the profit-maximizing output will always change.

When a tax of $t$ per unit is levied on a monopolist, the firm's effective marginal cost increases by $t$.

In a monopolistic market, if the demand becomes more elastic, the price will always decrease.

A monopolist can supply the same quantity at different prices.

If a firm's demand is elastic, the markup will be small and the firm will have little monopoly power.

A single supermarket can raise its prices significantly without losing customers due to the small elasticity of market demand for food.

Small convenience stores typically charge lower prices than supermarkets due to their less price-sensitive customers.

In a monopsonistic market, the monopsonist purchases quantity Q*m where marginal expenditure and marginal value intersect.

In a competitive market, price and quantity are both lower compared to a monopsonistic market.

In a monopoly, average revenue exceeds marginal revenue, leading to a situation where price exceeds marginal cost.

A monopsonist purchases up to the point where marginal expenditure intersects average expenditure.

Monopsony power depends on the elasticity of demand.

When supply is inelastic in a monopsonistic market, the price paid by the monopsonist is close to what it would be in a competitive market.

Patent laws protect the monopoly positions of firms that developed unique innovations.

Predatory pricing is a practice of pricing to drive future competitors out of business and to discourage new entrants in a market.

More Quizzes Like This

Pricing Theory and Microeconomics

Price Discrimination in Microeconomics

Microeconomics: Understanding External Factors

Microeconomics Pricing and Supply Patterns

econ2001 chap10 T&F