ECN 104 Chapter 13 Test Questions
and Answers 100% Correct
2 types of price regulation - Answer- 1. avg cost pricing ( P = ATC )
2. Marginal cost pricing ( P = MC)
Price discrimination - Answer- charging different prices for same good in order to
increase profits.
single price monopolist - Answer- offers its product to all consumers at the same price
Perfect price discrimination - Answer- charges each consumer price equal to their
willingness to pay
to maximize profit - Answer- MR = MC
to maximize for perfectly competitive market - Answer- MR = P
to maximize profit for monopolists - Answer- MR = MC
demand curve for perfect competition - Answer- horizontal, perfect elastic
demand curve for monopolist - Answer- downward sloping
if MR > MC - Answer- increase production
if MR < MC - Answer- decrease production
quantity effect - Answer- one more unit is sold, increasing total revenue by the price at
which the unit is sold
price effect - Answer- to sell last unit, monopolist must cut the price of all units sold. this
decreases total revenue
4 main types of market structure - Answer- 1) Perfect Competition
2) Monopoly
3) Oligopoly
4) Monopolistic Competition
and Answers 100% Correct
2 types of price regulation - Answer- 1. avg cost pricing ( P = ATC )
2. Marginal cost pricing ( P = MC)
Price discrimination - Answer- charging different prices for same good in order to
increase profits.
single price monopolist - Answer- offers its product to all consumers at the same price
Perfect price discrimination - Answer- charges each consumer price equal to their
willingness to pay
to maximize profit - Answer- MR = MC
to maximize for perfectly competitive market - Answer- MR = P
to maximize profit for monopolists - Answer- MR = MC
demand curve for perfect competition - Answer- horizontal, perfect elastic
demand curve for monopolist - Answer- downward sloping
if MR > MC - Answer- increase production
if MR < MC - Answer- decrease production
quantity effect - Answer- one more unit is sold, increasing total revenue by the price at
which the unit is sold
price effect - Answer- to sell last unit, monopolist must cut the price of all units sold. this
decreases total revenue
4 main types of market structure - Answer- 1) Perfect Competition
2) Monopoly
3) Oligopoly
4) Monopolistic Competition
