Question

In: Economics

Select the correct answer: A (legal; natural) monopoly exists when one firm can meet the entire...

Select the correct answer:

A (legal; natural) monopoly exists when one firm can meet the entire market demand at a lower average total cost than two or more firms could.

A monopoly that is able to sell different units of a good or service for different prices is a (natural-price; price-discriminating) monopoly.

The act of obtaining special treatment by the government to create an economic profit is called (government surplus; rent seeking).

Regulated firms have an incentive to inflate their costs under (rate of return; price cap) regulation.

The U.S. Postal Service has a (natural; legal) monopoly on first class mail delivery.

A (single-price; price discriminating) monopoly maximizes profit by producing the quantity at which marginal revenue equals marginal cost and then charging the maximum price that consumers are willing to pay for that quantity.

The key idea behind price discrimination is to convert (consumer surplus; producer surplus) into economic profit.

Solutions

Expert Solution

A natural monopoly exists when one firm can meet the entire market demand at a lower average total cost than two or more firms could. Such a firm has lower average total cost for the number of products produced and sold. There is a huge initial set up cost.

A monopoly that is able to sell different units of a good or service for different prices is a price-discriminating monopoly. By this method they are able to earn multiple profits from multiple consumers groups.

The act of obtaining special treatment by the government to create an economic profit is called rent seeking. By this method, lobbying is done to devise policies that are in favour of the monoopolies or oligopolies firms

Regulated firms have an incentive to inflate their costs under rate of return regulation. Under price cap regulation, the incentive is to keep the cost under control

The U.S. Postal Service has a legal monopoly on first class mail delivery.

A single-price monopoly maximizes profit by producing the quantity at which marginal revenue equals marginal cost and then charging the maximum price that consumers are willing to pay for that quantity.

The key idea behind price discrimination is to convert consumer surplus into economic profit.


Related Solutions

Mark the correct answer Select one: a. An analyst can be classified as a "trader" or...
Mark the correct answer Select one: a. An analyst can be classified as a "trader" or "broker". b. A commercial bank is an institution that helps companies in their financing and securities (bonds, shares, etc.) issuance processes c. No answer d. None of the above is correct. e. An investment bank is an institution that offers deposits and loans
(Select all correct answers; one or more than one answer may be correct.) In cases of...
(Select all correct answers; one or more than one answer may be correct.) In cases of renal failure, plasma (extracellular) concentrations of K+ may increase from normal levels of 4-5 mM to 10 to 12 mM. From what you know of the effects of increasing extracellular K+ on the membrane potential (EK = RT/zF x ln[Ko/Ki) and the effects of membrane potential on the HCN channel (hint, remember what H stands for), you would expect the increased extracellular concentration of...
When a home currency depreciates, which one of the following is NOT correct? Select one: a....
When a home currency depreciates, which one of the following is NOT correct? Select one: a. home exporters have more advantages than home importers b. home importers have more advantages since it takes more home currency to buy the foreign currency c. a foreign currency is more valuable than the home currency d. the home currency has less purchasing power in the world trade markets
Select the correct answer: 1.One of the following is the origin of a magnetostatic field:   ...
Select the correct answer: 1.One of the following is the origin of a magnetostatic field:    a. 2 electric charges    b. direct current on a wire    c. constant electric field    d. disc loaded 2. It is known that the self-induced electromotive force in a long selenoid, through which a variable current flows with time, depends on the factors that are described below, indicating which is the most influential:    a. the number of turns    b. the...
When considering a sole proprietorship, which of the following statements is correct? Select one: a. One...
When considering a sole proprietorship, which of the following statements is correct? Select one: a. One of the benefits of a sole proprietorship is to protect the owner’s personal data b. The sole proprietor is subject to double taxation c. All company debt is the responsibility of the owner d. The sole proprietorship is becoming an extinct business structure e. A sole proprietorship and a limited liability company has the same structure When making capital structure decision, which of the...
Which of the following statements is CORRECT? Select one: a. If a firm follows generally accepted...
Which of the following statements is CORRECT? Select one: a. If a firm follows generally accepted accounting principles (GAAP), then its reported net income will be identical to its reported net cash flow. b. The income statement shows us the firm’s financial situation over a period of time. c. The emphasis in finance is on the determination of accounting income since the value of a firm is determined by the net income generated. d. The statement of cash flows tells...
Select the MOST CORRECT answer. In a cardiac myocyte, changes in the permeability of ions can...
Select the MOST CORRECT answer. In a cardiac myocyte, changes in the permeability of ions can lead to a change in membrane potential. In... A conducting cardiac myocyte, the rapid depolarization is caused by the opening of T-type calcium channels. A contractile cardiac myocyte, the rapid depolarization is caused by the opening of L-type calcium channels. Both conducting and contracting cardiac myocytes, the influx of sodium and calcium cause the membrane to depolarize and the efflux of potassium causes repolarization....
When a natural monopoly is regulated using an average cost pricing rule, what can you say...
When a natural monopoly is regulated using an average cost pricing rule, what can you say about the firm's profit and the market's efficiency?
Select the correct answer or answers for each and explain: 1. When you take a book...
Select the correct answer or answers for each and explain: 1. When you take a book from your desk and put it up on a shelf above you the work done on the book depends on: (1) how fast you moved the book, (ii) depends on whether you moved it straight up or along an arched path, (iii) depends on how high the shelf is, (iv) depends on the mass of the book. d. A 80-kg baseball player while running...
47. Which of the following statements are correct? Select which option is correct. Select one or...
47. Which of the following statements are correct? Select which option is correct. Select one or more: The level of professional skepticism can be reduced where the auditor has past experience with the entity indicating the honesty and integrity of management. The level of professional skepticism needs to be maintained throughout the whole engagement. Professional skepticism implies an expectation of fraud or error, so is a biased viewpoint. Professional skepticism is not important in considering management's explanations for unusual trends...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT