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3932 Monopoly
31.
Refer to Table 15-22. The marginal revenue becomes negative with the production of which
unit of output?
32.
State one benefit of government-granted monopolies like patents and copyrights.
33.
When a single firm can supply a good or service to an entire market at a lower cost than could
two or more firms,
the industry is known as a
34.
The distribution of water to residents of a town and an infrequently used bridge are examples of
Monopoly 3933
Figure 15-24
35.
Refer to Figure 15-24. Which letter represents the profit-maximizing quantity chosen by the
single price monopolist?
36.
Refer to Figure 15-24. Which letter represents the profit-maximizing price chosen by the single
price monopolist?
37.
Refer to Figure 15-24. Use the letters in the figure to identify the profit area for the single price
monopolist.
38.
Refer to Figure 15-24. Use the letters in the figure to identify the area of deadweight loss for
the single price
monopolist.
39.
Refer to Figure 15-24. If this firm were able to perfectly price discriminate, which letter
represents the amount of
output it would produce?
40.
Refer to Figure 15-24. Use the letters in the figure to identify the profit area if this firm were
able to perfectly price
discriminate.
Scenario 15-11
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per
tour and each tour
lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent’s
cost is not reduced if he runs a tour with
a partially full bus. While his cost is the same for all
tours, Vincent charges each passenger his/her willingness to
pay: adults $18 per trip, children $10
per trip, and senior citizens $12 per trip. At those rates, on a typical day
Vincent’s demand is:
Passenger Type
Willingness to Pay
Demand per day
Adults
$18
70
Children
$10
25
Senior Citizens
$12
55
Assume that Vincent’s customers are always available for the tour; therefore, he can fill his bus
for each tour as long as there is sufficient total demand for the day.
41.
Refer to Scenario 15-11. Vincent uses a pricing practice called
42.
Refer to Scenario 15-11. What is Vincent’s cost of serving all passengers demanding a tour on
a typical day?
43.
Refer to Scenario 15-11. What is Vincent’s profit on a typical day?
44.
Refer to Scenario 15-11. One of Vincent’s friends tells him he would be more profitable if he
charged a single price of $18. Assuming no changes in consumer demand, what would Vincent’s
profit be if he charged every customer $18?
45.
Refer to Scenario 15-11. One of Vincent’s friends tells him he would be more profitable if he
charged a single price of $12. Assuming no changes in consumer demand, what would Vincent’s
profit be if he charged every customer $12?
Figure 15-25
46.
Refer to Figure 15-25. If this firm profit maximizes, which letter represents the price it will
charge?
47.
Refer to Figure 15-25. If this firm profit maximizes, which letter represents the quantity it will
produce?
48.
Refer to Figure 15-25. If a regulator requires this firm to charge a socially optimal price, which
letter represents the
amount of output it will produce?
49.
Refer to Figure 15-25. If a regulator requires this firm to charge a fair return price, which
letter represents the
amount of output it will produce?
50.
Refer to Figure 15-25. If a regulator requires this firm to charge a socially optimal price, how
much deadweight loss
results?
