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Pure Monopoly |
Single firm producing a product for which there are no close substitutes? |
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Purely monopolistic |
Firm that faces a downsloping demand curve? |
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Barriers to entry |
Pure monopolists may obtain economic profits in the long run because of ? |
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Only bank in a small town |
Which of the following best approximates a pure monopoly? |
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X-efficiency |
Which of the following is not a barrier to entry? |
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basis for monopoly |
Barriers to entering an industry? |
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natural monopoly |
long-run average costs decline continuously through the range of demand |
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natural monopoly |
Large minimum efficient scale of plant combined with limited market demand may lead to? |
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Barriers to entry |
What do economies of scale, the ownership of essential raw materials, and patents have in common? |
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Industry demand curve |
The nondiscriminating pure monopolist’s demand curve? |
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less elastic than a purely competitive firm’s demand curve |
The nondiscriminating monopolist’s demand curve? |
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Marginal revenue curve lies below the demand curve b/c any reduction in price applies to all units sold |
for an imperfectly competitve firm |
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increase profits by increasing price |
when a firm is on the inelastic segment of its demand curve, it can |
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price exceeds marginal revenue at all outputs greater than 1 |
With respect to the pure monopolists demand curve it can be said that |
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less elastic than that faced by a single purely competitive firm |
the demand curve faced by a pure monopolist |
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Becomes negative when output increases beyond some particular level |
The marginal revenue curve for a monopolist |
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it is the same as the market demand curve |
Which of the following is characteristic of a pure monopolist’s demand curve |
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price must be lowered to sell more output |
Because the monopolist’s demand curve is downsloping? |
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in the price range where marginal revenue is positive |
The pure monopolist’s demand curve is relatively elastic |
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ill never produce in the output range where demand is inelastic |
A nondiscriminating profit maximizing monopolist |
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Marginal revenue is positive when total revenue is increasing, but marginal revenue becomes negative when total revenue is decreasing |
For a pure monopolist the relationship between total revenue and marginal revenue is that? |
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When a monopolist lowers price to sell more output, the lower price applies to all units sold |
For a pure monopolist marginal revenue is less than price because? |
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inelastic segment of its demand curve bc it can increase total revenue and reduce total cost by increasing price |
a pure monopolist should never produce in the |
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charge a higher price |
Assume a pure monopolist is currently operating at a price-quantity combination on the inelastic segment of its demand curve. if the monopolist is seeking maximum profits, it should |
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must lower price to increase sales |
Assuming no change in product demand, a pure monopolist |
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the firm would not be maximizing profits |
if a monopolist were to produce in the inelastic segment of its demand curve? |
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Marginal revenue will be positive but declining |
If a pure monopolist is operating in a range of output where demand is elastic? |
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product price and average revenue |
The vertical distance between the horizontal axis and any point on a nondiscriminating monopolist’s demand curve measures |
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total revenue is increasing |
Suppose a pure monopolist is charging a price of $12 and the associated marginal revenue is $9. We thus know that? |
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price of the 7th unit is $11 |
A pure monopolist is selling 6 units at a price of $12. If the marginal revenue of the seventh unit is $5, then? |
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