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When a firm’s average-total-cost curve continually declines, what is the firm considered?

None of the above.

a subsidized monopoly

a natural monopoly

a government-created monopoly

a revenue monopoly

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When Dominant Pizza is willing to sell a pizza to a student who lives on-campus at a lower price than it sells the identical pizza to a student who lives a block away from the campus, the pizza firm is

eliminating all competition.

incurring a loss on on-campus sales.

practising price discrimination.

located close to the campus.

implementing unfair pricing practices.

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Rent seeking is best defined as

a means of eliminating deadweight loss.

the pursuit of wealth by capturing economic rent.

owners of a monopoly selling the firm at the highest possible price.

an attempt by landlords to get tenants.

an attempt by individuals to avoid paying taxes.

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Which of the following attributes does a firm that is a natural monopoly have?

It is very likely to be concerned about new entrants eroding its monopoly power.

None of the above.

It experiences economies of scale.

It would experience lower average total revenue if more firms entered the market.

It is taking advantage of loyal consumers.

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In a natural monopoly, the long-run average cost curve

is horizontal in the relevant range of output levels.

is upward sloping in the relevant range of output levels.

is downward sloping in the relevant range of output levels.

may be either upward sloping or downward sloping in the relevant range of output levels.

lies below the marginal cost curve.

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If a monopolist is able to perfectly price discriminate, which of the following outcomes results?

Consumer surplus and deadweight losses are transformed into monopoly profits.

None of the above.

Consumer surplus is always increased.

Total surplus is always decreased.

The price effect dominates the output effect on monopoly revenue.

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Consider a profit-maximizing single-price monopolist that faces a linear demand curve. The firm sets price where the price elasticity of demand is

greater than one.

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A monopoly is distinguished from a firm operating under any other market structure in the following way: the monopoly

faces a demand curve which is identical to the market demand curve.

charges a price higher than its average revenue.

can choose its level of cost.

can choose its output level.

does not produce at a profit-maximizing level of output.

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A perfect price-discriminating monopoly

is inefficient.

will produce the quantity at which the marginal cost curve intersects its demand curve.

has a demand curve that is also its marginal revenue curve.

maximizes total revenue.

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What is consumers’ willingness to pay for a good minus the amount they actually pay for it?

consumer surplus

None of the above.

the subsidy per unit

the tax per unit

consumer benefit

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