11) If the market in the figure above changes from perfectly competitive to a profit-maximizing single-price monopoly, the amount of the gain in producer surplus is the area ________.
A) ABH
B) BFGH
C) ACG
D) BDEH
E) ACE
The figure above shows a natural monopoly regulated using a marginal cost pricing rule.
12) In the figure above, an
A) efficient output results, but the firm incurs a loss per household which must be subsidized in some way.
B) inefficient output results, though the firm covers its costs.
C) efficient output results, though marginal costs exceed average total costs.
D) inefficient output results because the firm cannot cover its costs.
E) efficient output results because consumer surplus is maximized.
13) In the figure above, the length of the double sided arrow is the
A) consumer surplus.
B) deadweight loss.
C) producer surplus.
D) economic loss per unit.
E) economic profit.
14) In the figure above, the dark triangle is the
A) consumer surplus.
B) deadweight loss.
C) producer surplus.
D) total cost.
E) economic profit.
The figure above shows a natural monopoly.
15) In the figure above, if the firm is regulated using an average cost pricing rule, the firm
A) avoids an economic loss, but produces less than the efficient quantity and creates a deadweight loss.
B) incurs an economic loss, but produces the efficient quantity and creates a deadweight loss.
C) avoids an economic loss, is able to produce the efficient quantity, and therefore avoids creating a deadweight loss.
D) avoids an economic loss, produces the efficient quantity, and creates a deadweight loss.
E) incurs an economic loss, produces the efficient quantity, and avoids creating a deadweight loss.
16) In the figure above, if the firm is regulated using an average cost pricing rule, the deadweight loss created is equal to the area of
A) ABG.
B) BEFG.
C) BCFG.
D) BCE.
E) None of the above because there is no deadweight loss created.
17) In the figure above, if the firm is regulated using a marginal cost pricing rule, the deadweight loss created is equal to the area of
A) ABG.
B) BEFG.
C) BCFG.
D) BCE.
E) None of the above because there is no deadweight loss created.
18) In the figure above, if the firm is regulated using an average cost pricing rule, the consumer surplus created is equal to the area of
A) ABG.
B) BEFG.
C) BCFG.
D) BCE.
E) None of the above because there is no consumer surplus created.
19) In the figure above, if the firm is regulated using a marginal cost pricing rule, the consumer surplus created is equal to the area of
A) ABG.
B) ACF.
C) BCFG.
D) BCE.
E) None of the above because there is no consumer surplus created.
20) In the figure above, if the firm is regulated using an average cost pricing rule, the economic loss created is equal to the area of
A) ABG.
B) BEFG.
C) BCFG.
D) BCE.
E) None of the above because there is no economic loss created.
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