#1
In monopoly, what is the characteristic feature of the firm?
Single seller
ExplanationMonopoly: Single seller dominates market.
#2
What is price discrimination?
Charging different prices to different consumers for the same product
ExplanationPrice Discrimination: Varying prices for same product.
#3
What is the profit-maximizing rule for a monopolist?
Produce where marginal revenue equals marginal cost
ExplanationMonopolist's Profit Maximization: MR equals MC.
#4
Which of the following is an example of a natural monopoly?
Electricity distribution
ExplanationNatural Monopoly: Electricity distribution.
#5
Which of the following is a condition necessary for price discrimination to occur?
Market power
ExplanationPrice Discrimination: Requires market power.
#6
What is the main goal of price discrimination for a monopolist?
To capture more consumer surplus as producer surplus
ExplanationPrice Discrimination: Monopolist aims for more producer surplus.
#7
Which of the following is a characteristic of first-degree price discrimination?
The monopolist charges the maximum price each consumer is willing to pay
ExplanationFirst-degree Price Discrimination: Charges maximum price each consumer will pay.
#8
What is a necessary condition for third-degree price discrimination?
The elasticity of demand must be different between consumer groups
ExplanationThird-degree Price Discrimination: Elasticity of demand differs among consumer groups.
#9
Which of the following is NOT a potential consequence of price discrimination?
Decreased producer surplus
ExplanationPrice Discrimination: Does not necessarily decrease producer surplus.
#10
Which type of price discrimination occurs when a firm charges different prices based on the quantity consumed?
Second-degree price discrimination
ExplanationPrice Discrimination: Varying prices based on quantity consumed.
#11
Under perfect price discrimination, what happens to consumer surplus?
It becomes zero
ExplanationPerfect Price Discrimination: Consumer surplus becomes zero.
#12
What is a potential limitation of using perfect price discrimination in practice?
It requires perfect information about consumer preferences
ExplanationPerfect Price Discrimination: Requires perfect information.
#13
What is the primary objective of a monopolist engaging in price discrimination?
To capture more surplus from consumers
ExplanationPrice Discrimination: Capturing more consumer surplus.