8: Monopoly

Question 1

If market demand is downward sloping straight line what is true about the marginal revenue curve?

Answer 1

It is also a straight line and the slope is twice as large as the slope of demand

Question 2

If organized as a monopoly its output will be blank than competitive and price will be blank

Answer 2

Smaller; larger

Question 3

Total revenue curve is at its max what is true at this quanity

Answer 3

Marginal revenue is zero and demand is unit elastic

Question 4

Why does monopoly lead to deadweight loss

Answer 4

The consumer surplus is greater than the monopoly profits

Question 5

Demand is downward sloping. What is true

Answer 5

It is not perfectly competitive, MR is downward sloping and twice and steep, and it will charge a price ghat is greater than marginal cost

Question 6

Short run supplu curve of monoploy

Answer 6

Monopolies dont have a unique well defind supply curve

Question 7

Deadweight loss of monopoly

Answer 7

Difference between consumers loss and producers gain, represented by a triangle, and a dollar measure of societites loss from having an industry that is a monopoly

Question 8

Marginal cost are positive this means that marginal revenue is postive what is true of demand

Answer 8

Demand is elastic

Question 9

Monopoly: marginal cost decreases how will firm change price and quanity

Answer 9

Reduce price and increase quanity

Question 10

Deadweight loss is represented by the area of blank and monopoly profit blank

Answer 10

Triangle; rectangle

Question 11

Monopoly: sells more output and total revenue decreases that means

Answer 11

Marginal revenue is negative, not max profit should sell smaller at higher, facing inelastic demand

Question 12

Monopoly: downward straight demand means total reveue is

Answer 12

A line that increases reaches max and then decreases

Question 13

Decrease in consumer surplus is represented by

Answer 13

The area of a trapezoid