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21) Refer to Figure 13.4.5. What the redistribution of surplus

Question : 21) Refer to Figure 13.4.5. What the redistribution of surplus : 1418012

 

 

21) Refer to Figure 13.4.5. What is the redistribution of surplus from consumers to the producer with a perfect price-discriminating monopoly, as compared to a perfectly competitive market?

A) EADH

B) EABH

C) ABD

D) ACD

E) KHD

22) When a monopoly practices price discrimination ________.

A) it charges different prices to different consumers and transfers some of the consumer surplus to economic profit

B) it produces a smaller quantity than when it is a single-price monopoly which decreases consumer surplus

C) new firms enter the industry, so buyers have more goods from which to choose and consumer surplus increases

D) consumer surplus increases because the monopoly increases the quantity available for sale

E) firms exit the industry and consumer surplus decreases

 

23) Donna owns the only dog grooming salon on Lonely Island. If Donna can price discriminate between dog owners who are seniors and those who are not, her economic profit will be ________ than if she does not price discriminate and the number of dog groomings will be ________ if she does not price discriminate.

A) greater; more than

B) greater; less than

C) less; more than

D) less; less than

E) greater; the same as

 

24) The more perfectly a monopoly can price discriminate, the

A) smaller its output and the lower its profit.

B) smaller its output and the higher its profit.

C) larger its output and the lower its profit.

D) larger its output and the higher its profit.

E) none of the above.

25) Which of the following occurs with both perfectly price-discriminating and single-price monopolies?

A) The amount of output is inefficient.

B) All consumer surplus goes to the monopoly.

C) Deadweight loss is created.

D) There is a redistribution of consumer surplus to the monopoly.

E) Demand is perfectly elastic.

 

26) Which of the following is true for a perfect price-discriminating monopoly?

A) P = MR for each unit sold.

B) P = ATC for each unit sold.

C) P = MC for each unit sold.

D) P > MC for each unit sold.

E) P > MR for each unit sold.

 

27) If a monopolist can perfectly price discriminate, then

A) price equals average cost for each unit sold.

B) price equals marginal cost for each unit sold.

C) price equals marginal cost for the last unit sold.

D) the firm can ignore the marginal cost curve.

E) price is greater than marginal revenue for each unit sold.

 

28) For a monopoly able to practice perfect price discrimination, the market

A) supply curve is horizontal.

B) supply curve is the same as the marginal revenue curve.

C) demand curve is the same as the marginal cost curve.

D) demand curve is the same as the marginal revenue curve.

E) demand curve is horizontal.

Use the figure below to answer the following questions.

 

 

Figure 13.4.6

 

29) Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2 per inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals a monopoly for its new inhaler. If Prime Pharmaceuticals can perfectly price discriminate, then it

A) sells 16 million inhalers.

B) charges a price of $2 for each inhaler it sells.

C) sells inhalers for $6 each.

D) makes zero economic profit.

E) Both A and B are correct.

 

30) Prime Pharmaceuticals has developed a new asthma medicine, for which it has a patent. An inhaler can be produced at a constant marginal cost of $2 per inhaler. The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are shown in Figure 13.4.6. The patent gives Prime Pharmaceuticals a monopoly for its new inhaler. If Prime Pharmaceuticals can perfectly price discriminate, then consumer surplus is

A) zero.

B) $24 million.

C) $64 million.

D) $44 million.

E) $32 million.

 

 

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