Question

Which of the following are effects of monopoly? A. Monopoly causes a reduction in economic efficiency. B. Monopoly causes a reduction in consumer surplus. C. Monopoly causes an increase in producer surplus. D. All of the above.

If a pure monopolist is choosing an output level where marginal revenue is positive but smaller than marginal cost: A. the firm should produce more output. B. the firm should maintain its output level, but raise the price. C. the firm should produce less output. D. it is probably maximizing profits.

When the patent expires on a pharmaceutical drug, what happens to the market? A. It shifts from being a monopoly to being perfectly competitive. B. It remains a monopoly, but profits are lower. C. It remains perfectly competitive, but profits are higher. D. It shifts from being perfectly competitive to being a monopoly.

Which of the following are key results of price discrimination? A. Profits increase and consumer surplus increases. B. Profits descrease and consumer surplus decreases. C. Profits decrease and consumer surplus increases. D. Profits increase and consumer surplus decreases.

Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. This pricing system occurs because: A. children have an elastic demand for game ticket but an inelastic demand for concession items. B. the seller can prevent children from buying game tickets for adults but cannot prevent children from buying concession items for adults. C. children can personally "consume" only a single game ticket, but can personally consume more than one concession item. D. children have an inelastic demand for game tickets but an elastic demand for concession items.

Answer 1