31) Compared to a perfectly competitive market, a single-price monopoly sets A)

Question

31) Compared to a perfectly competitive market, a single-price monopoly sets A) a lower price. B) the same price. a higher price. D) a price that might be higher, Jower, or the same depending on whether the monopoly's marginal revenue curve les above, below, or on its demand curve. E) a price that might be higher, lower, or the same depending on whether the monopolys marginal cost curve lies above, below, or on its marginal revenue curve. 32) f we compare a perfectly competitive market to a single-price monopoly with the same costs, the monopoly sels A) the same quantity at a higher price. B) a smaller quantity at a higher price. C) a larger quantity at a lower price. D) a larger quantity at a higher price. E) a smaller quantity at the same price. 33) Rent seeking is defined as A) charging higher prices for an apartment B) the act of obtaining special treatment by the govemment to create an economic profit C) charging a price below marginal cost D) selling a greater quantity than is profitable. E) charging different prices for different units of the good or service. 34) A price-discriminating monopoly charges A) the same price to every buyer for the same product B) a different price to different types of buyers for the same product, even though there are no differences in costs C) a different price to different buyers, because the costs are different. D) different prices to buyers for different products. E) each customer a price that equals the marginal cost of serving that customer. 35) An airline company A) cannot price discriminate because it is against the law B) price discriminates by charging higher prices to business travelers. C) price discriminates by charging lower prices to business travelers. D) price discriminates even though its profits are lower because competition forces it to do so fewer customers because it price discriminates than it would have if it did not price discriminate. 36) Monopolies arise when there are A) many substitutes but there are no barriers to entry B) no close substitutes and there are no barriers to entry C) no close substitutes and there are barriers to entry D) many substitutes and there barriers to entry E) None of the above answers are correct because the existence of a monopoly has nothing to do with the presence or absence of barriers to entry 37) Monopolistic competition is identified by A) many firms producing a slightly differentiated product. B) many firms producing identical goods. C) one firm producing a unique good. D) a few firms producing a slightly differentiated product. E) large barriers to entry

Explanation / Answer

31) Compare to a perfectly competitive market, a single-price monopoly sets

Solution: a higher price

Explanation: A single-price monopoly sets higher prices to earn super-normal profits

32) If we compare a perfectly competitive market to a single-price monopoly with the same costs, the monopoly sets

Solution: a smaller quantity at a higher price

Explanation: A single-price monopoly sets higher prices to earn super-normal profits

33) Rent seeking is defined as

Solution: The act of obtaining special treatment by the government to create an economic profit

Explanation: Rent-seeking is an entity's or individual's use of firm's or individual resources to obtain economic benefit without reciprocating any gains to society through wealth creation.

34) A price-discriminating monopoly charges

Solution: a different price to different types of buyers for the same product even though there are no differences in costs

Explanation: A price-discriminating monopolist charges different price to different types of buyers for profit maximisation

35) An airline company

Solution: price discriminates by charging higher price to business travelers

Explanation: Business travellers often pay higher airline fares in comparison to vacation travellers

36) Monopolies arise when there are

Solution: no close substitutes and there are barriers to entry

Explanation: A monopoly is a market with a single seller of a product with no close substitutes

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