Option A: charging different prices on the basis of race
Option B: charging different prices for goods with different costs of production
Option C: charging different prices based on cost-of-service differences
Option D: selling a certain product of given quality and cost per unit at different prices to different buyers
Correct Answer: selling a certain product of given quality and cost per unit at different prices to different buyers ✔
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Option A: charge a higher price
Option B: produce a lower quantity of the product
Option C: make a greater amount of economic profit
Option D: all of the above
Correct Answer: all of the above ✔
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Option A: the price is greater than the marginal revenue
Option B: the price is less than the marginal revenue
Option C: there is no relation
Option D: they are equal
Correct Answer: the price is greater than the marginal revenue ✔
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Option A: increase should
Option B: decrease output
Option C: keep output the same because profits are maximized when marginal revenue exceeds marginal cost
Option D: raise the price
Correct Answer: increase should ✔
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Option A: will rise
Option B: will fall
Option C: will remain the same
Option D: could either rise or fall depending on the elasticity of the monopolist’s supply curve
Correct Answer: will rise ✔
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Option A: tends to be inefficient.
Option B: usually lowers the cost of production dramatically.
Option C: creates synergies between the newly acquired firm and other government-owned companies.
Option D: does none of the things described in these answers
Correct Answer: tends to be inefficient. ✔
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Option A: Cause the monopolist to exit the market
Option B: improve efficieny
Option C: raise the price of good
Option D: attract additional firms to enter the market
Correct Answer: Cause the monopolist to exit the market ✔
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Option A: higher prices and lower output
Option B: higher prices and higher output
Option C: lower prices and lower output
Option D: lower prices and higher output
Correct Answer: higher prices and lower output ✔
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Option A: marginal revenue equals marginal cost
Option B: marginal revenue equals price
Option C: marginal cost equals price
Option D: marginal cost equals demand
Correct Answer: marginal revenue equals marginal cost ✔
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Option A: natural monopoly
Option B: perfect competitor
Option C: government monopoly
Option D: regulated monopoly
Correct Answer: natural monopoly ✔
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Option A: Bans monopolies
Option B: Fines all monopolies
Option C: Prevents firms acquiring more than 25% of the market
Option D: Has the right to investigate monopolies and will assess each one on its own merits
Correct Answer: Has the right to investigate monopolies and will assess each one on its own merits ✔
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Option A: Monopolies are inefficient
Option B: Monopoly profits ac as an incentive for innovation
Option C: Monopolies are alocatively efficient
Option D: Monopolies are productively efficient
Correct Answer: Monopoly profits ac as an incentive for innovation ✔
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Option A: Products are differentiated
Option B: There is freedom of entry and exit into the industry in the long run
Option C: The firm is a price taker
Option D: There is one main sellers
Correct Answer: There is freedom of entry and exit into the industry in the long run ✔
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Option A: The firm is Productively efficient
Option B: The firm is allocatively inefficient
Option C: The firm produces where marginal cost is less than marginal revenue
Option D: The firm produces at the socially optimal level
Correct Answer: The firm is allocatively inefficient ✔
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Option A: Equals the demand curve
Option B: Is parallel with the demand curve
Option C: Lies below and converges with the demand curve
Option D: Lies below and diverges from the demand curve
Correct Answer: Lies below and diverges from the demand curve ✔
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Option A: The section with the richest people
Option B: The section with the oldest people
Option C: The section with the most inelastic demand
Option D: The section with the most elastic demand
Correct Answer: The section with the most inelastic demand ✔
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Option A: some degree of monopoly power
Option B: an ability to separate the market
Option C: an ability to prevent reselling
Option D: all of the above
Correct Answer: all of the above ✔
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Option A: economies of scale
Option B: a high proportion of the total cost in the cost of capital goods
Option C: the market is very small
Option D: all of the above
Correct Answer: all of the above ✔
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Option A: marginal revenue equals average total cost
Option B: Price equals marginal revenue
Option C: marginal revenue equals marginal cost
Option D: total revenue equals total cost
Correct Answer: marginal revenue equals marginal cost ✔
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Option A: One seller of the product
Option B: low barriers to entry
Option C: close substitute products
Option D: perfect information
Correct Answer: One seller of the product ✔
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Option A: there is some barrier to entry to that market
Option B: Potential competitors sometimes don’t notice the the profits.
Option C: the monopolist is financially powerful.
Option D: antitrust laws eliminate competitors for a specified number of years.
Correct Answer: there is some barrier to entry to that market ✔
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Option A: Perfect price discrimination generates a deadweight loss
Option B: Price discrimination can raise economic welfare.
Option C: price discrimination requires that seller be able to separate buyers according to their willingness to pay.
Option D: Price discrimination increases a monopolist’s profits.
Correct Answer: Perfect price discrimination generates a deadweight loss ✔
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Option A: Increase competition in an industry by preventing mergers and breaking up large firms.
Option B: regulate the prices charged by a monopoly
Option C: increase merger activity to help generate synergies that reduce costs and raise efficiency.
Option D: create public ownership of natural monopolies
Correct Answer: Increase competition in an industry by preventing mergers and breaking up large firms. ✔
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Option A: does not exist
Option B: is the marginal cost curve above average variable cost?
Option C: is the marginal cost curve above average total cost
Option D: is the upward-sloping portion of the average total cost curve
Correct Answer: does not exist ✔
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Option A: underproduction of the good
Option B: the monopoly’s profits
Option C: the monopoly’s losses
Option D: overproduction of the good
Correct Answer: underproduction of the good ✔
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Option A: Thomson has a legally protected exclusive right to produce this textbook
Option B: Thomson owns a key resource in the production of textbooks.
Option C: Thomson is a natural monopoly,
Option D: Thomson is a very large company
Correct Answer: Thomson has a legally protected exclusive right to produce this textbook ✔
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Option A: In competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost.
Option B: In competitive markets price equals marginal cost, in monopolized markets price equals marginal cost
Option C: In competitive markets price exceeds marginal cost, in monopolized markets price exceeds marginal cost
Option D: In competitive markets price exceeds marginal cost in monopolized markets price equals marginal cost
Correct Answer: In competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost. ✔
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When a monopolist produces an additional unit, the marginal revenue generated by that unit must be ?
Option A: below the price because the price effect outweighs the output effect
Option B: above the price because the output effect outweighs the price effect
Option C: above the price because the price effect outweighs the output effect
Option D: below the price because the output effect outweighs the price effect
Correct Answer: below the price because the price effect outweighs the output effect ✔
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Option A: A single firm is very large
Option B: The government gives a single firm the exclusive right to produce some good
Option C: The costs of production make a single producer more efficient than a large number of productions
Option D: A key resource is owned by a single firm
Correct Answer: A single firm is very large ✔
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Option A: The price is greater than the marginal cost
Option B: The price is greater than the marginal benefit
Option C: The price is greater than the average revenue
Option D: The price is greater than the marginal revenue
Correct Answer: The price is greater than the marginal cost ✔
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Option A: There are many buyers and sellers
Option B: There is one main buyer
Option C: There is one main seller
Option D: The actions of one firm do not affect the market price and quantity
Correct Answer: There is one main seller ✔
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Option A: Patents
Option B: Internal economies of scale
Option C: Mobility of resources
Option D: High investment costs
Correct Answer: Mobility of resources ✔
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Option A: The price set is greater than the marginal cost
Option B: The price is less than the average cost
Option C: The average revenue equals the marginal cost
Option D: Revenue equals total cost
Correct Answer: The price set is greater than the marginal cost ✔
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Option A: The price is greater than the marginal cost
Option B: The price is greater than the average cost
Option C: Costs are higher than they could be due to a lack of competitive pressure
Option D: There are external cost
Correct Answer: Costs are higher than they could be due to a lack of competitive pressure ✔
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