ECON 2101: Ch 13 -
Monopoly (19 questions and
answers)
define market power - answer the power to raise prices above marginal costs
without feat that other firms will enter the market
define monopoly - answer a firm with market power
1. firms with _______ power will _______ above cost.
2. maximizing profit occurs at: ____=______
3. for small firms: MR = ______ from one addition unit
4. a firms _____ of a product is large relative to _______.
5. when the demand curve is a straight line, _______ - answer 1. market; price
2. MR = MC
3. price
4. output; the entire market
5. the marginal revenue curve begins at the same point on the vertical axis
as the demand curve and has twice the slop
, define marginal revenue - answer the change in total revenue from selling
one additional unit; for a firm in a competitive industry
define total surplus - answer total gains from trade: consumer surplus +
producer surplus
// moves to monopolies profit and deadweight loss
1. competition maximizes ______.
2. why are monopolies bad?
3. when are monopolies especially harmful?
4. competition pushes prices ______
5. If competition pushes prices ______ to _____, nothing will be available for
the cost of _______
6. If patents are not enforced, _______ - answer 1. total surplus
2. they reduce total surplus compared to competition
3. monopolies are especially harmful when the goods that are monopolized
are used to produce other goods
4. down
5. down; MC; invention
Monopoly (19 questions and
answers)
define market power - answer the power to raise prices above marginal costs
without feat that other firms will enter the market
define monopoly - answer a firm with market power
1. firms with _______ power will _______ above cost.
2. maximizing profit occurs at: ____=______
3. for small firms: MR = ______ from one addition unit
4. a firms _____ of a product is large relative to _______.
5. when the demand curve is a straight line, _______ - answer 1. market; price
2. MR = MC
3. price
4. output; the entire market
5. the marginal revenue curve begins at the same point on the vertical axis
as the demand curve and has twice the slop
, define marginal revenue - answer the change in total revenue from selling
one additional unit; for a firm in a competitive industry
define total surplus - answer total gains from trade: consumer surplus +
producer surplus
// moves to monopolies profit and deadweight loss
1. competition maximizes ______.
2. why are monopolies bad?
3. when are monopolies especially harmful?
4. competition pushes prices ______
5. If competition pushes prices ______ to _____, nothing will be available for
the cost of _______
6. If patents are not enforced, _______ - answer 1. total surplus
2. they reduce total surplus compared to competition
3. monopolies are especially harmful when the goods that are monopolized
are used to produce other goods
4. down
5. down; MC; invention
