monopoly
Price discrimination allows a monopolist to:
charge those customers with a greater willingness to pay a higher price, resulting in higher profit
If a monopolistically competitive firm is able to convince consumers that it sells a higher quality product than what is offered by rival firms:
the firm will be able to charge a higher price than rival firms
For a competitive firm hiring in a competitive labor market, the profit-maximizing rule is to hire labor to the point where
the value of the marginal product is equal to the wage rate
HHI less than 1,000
indicates a strongly competitive market
If electrical service can be more efficiently provided to a market by a single supplier than by many competing suppliers, the market is considered to be a(n):
natural monopoly
A pure monopoly is an industry in which:
one firm is the sole producer or seller of a product that has no close substitutes
A monopolistically competitive firm might be able to convince consumers that it sells a higher quality product than what is offered by rival firms:
by differentiating its product through advertising and branding
Derived demand is best represented by the demand for:
Wood by homebuilders
HHI between 1,000-1,800
Moderately Competitive
Which of the following is always true for a monopolist?
Profit is maximized where marginal revenue equals marginal cost
All of the following are examples of barriers to entry except
dis-economies of scale
Oligopolistic industries are characterized by:
a few dominant firms and interdependent decision making
Derived demand is best represented by the demand for: P2
nurses by hospitals
HHI more than 1800
highly concentrated; oligopoly
First-degree (perfect) price discrimination occurs when
the seller is able to charge each buyer the highest price the buyer will pay
A monopolist that earns positive economic profit in short-run equilibrium will
earn positive economic profit in the long run if it can maintain barriers to entry,assuming no changes in costs or market demand
If firms in an oligopoly market are able to collude, then:
the market price is likely to be higher and the output is likely to be lower than they would be if firms could not collude.
In a competitive labor market, an increase in the supply of labor, ceteris paribus, will:
decrease the market wage rate
All of the following are examples of barriers to entry except
constant returns to scale
Second-degree price discrimination occurs when:
the seller offers a volume discount to buyers who are willing to purchase more
All of the following are characteristics of a monopolistically competitive market except:
there are significant barriers to entry that prevent new firms from entering the market in the long run
If Acme Corporation has an HHI equal to 987 and its Top 4Concentration ratio is 49%, then Acme most likely operates in a _____ market structure
monopolistically competitive
A market is in danger of becoming concentrated when the HHI is equal to or greater than____ and the Top 4 Concentration Ratio is close to ______
1,800; 60%
The demand curve for a monopoly firm is:
the same as the industry, or market, demand curve for its product
In order to engage in price discrimination, a seller must be able to:
-prevent customers from re-selling the product to other customers
-charge a lower price to customers with more elastic demand.
-charge a higher price to customers with more inelastic demand.