Question : 21) With perfect price discrimination, a monopoly can extract the : 1226213

 

21) With perfect price discrimination, a monopoly can extract the ________ price each customer is willing to pay and thereby obtain the entire ________ surplus.

A) maximum; consumer

B) minimum; producer

C) maximum; producer

D) minimum; consumer

E) None of the above answers are correct.

22) When a firm is able to engage in perfect price discrimination, its marginal revenue curve

A) lies below its demand curve.

B) is the same as its demand curve.

C) lies above its demand curve.

D) is the same as its supply curve.

E) is undefined because it does not exist.

 

23) If a monopoly can perfectly price discriminate, then its marginal revenue curve will be

A) the same as its demand curve.

B) the same as its supply curve.

C) the same as its marginal cost curve.

D) a vertical line at the profit-maximizing quantity of output.

E) undefined because it does not exist.

 

24) Under which of the following does a monopoly’s demand curve become its marginal revenue curve?

A) all types of monopoly

B) only single-price monopoly

C) only perfect price discrimination

D) only price discrimination on the basis of the number of units purchased

E) any monopoly that price discriminates

25) With perfect price discrimination ________, and production is expanded until marginal revenue equals ________.

A) the firm’s demand curve becomes its marginal revenue curve; marginal cost

B) the firm’s demand curve becomes its marginal revenue curve; average total cost

C) the firm’s marginal revenue curve bisects the angle with which demand intersects the price-axis; marginal cost

D) the firm’s marginal revenue curve bisects the angle with which demand intersects the price-axis; average total cost

E) economic profit is maximized when the lowest price equals marginal cost; average total cost.

 

26) Compared to a single-price monopoly, when a monopoly can perfectly price discriminate, the deadweight loss

A) increases.

B) decreases.

C) remains the same.

D) becomes infinite.

E) probably changes, but more information is needed to determine if it increases, decreases, or remains constant.

 

27) With perfect price discrimination, the level of output

A) exceeds the efficient quantity.

B) is the same as the amount produced by any monopoly that price discriminates.

C) is the same as the amount produced in a perfectly competitive market.

D) equals the amount produced by a single-price monopoly.

E) is unknown.

28) Under which of the following is consumer surplus zero?

A) all types of monopoly

B) only single-price monopoly

C) only perfectly price-discriminating monopoly

D) only price discrimination on the basis of the number of units purchased

E) perfect competition

 

29) The deadweight loss with perfect price discrimination is

A) equal to the deadweight loss of a single-price monopoly.

B) sometimes less than and sometimes more than the deadweight loss of a single-price monopoly.

C) more than the deadweight loss of a single-price monopoly.

D) zero.

E) larger than the deadweight loss with perfect competition.

 

30) Which of the following industries is most likely closest to achieving perfect price discrimination?

A) the airline industry

B) the wheat industry

C) the textbook industry

D) the toilet paper industry

E) the soft drink industry

31) Which of the following must a firm be able to do to successfully price discriminate?

i.divide buyers into different groups according to their willingness to pay

ii.prevent resale of the good or service

iii.identify into which group (high willingness to pay or low willingness to pay) a buyer falls

A) ii only

B) i and ii

C) i and iii

D) iii only

E) i, ii, and iii

 

32) Which of the following is (are) price discrimination?

i.charging different prices based on differences in production cost

ii.charging business flyers a higher airfare than tourists

iii.charging more for the first pizza than the second

A) i only

B) ii only

C) ii and iii

D) i and iii

E) i, ii, and iii

 

33) When a monopoly price discriminates, it

A) increases the amount of consumer surplus.

B) decreases its economic profit.

C) converts consumer surplus into economic profit.

D) converts economic profit into consumer surplus.

E) has no effect on the deadweight loss in the market.

34) If a monopoly is able to perfectly price discriminate, then consumer surplus is

A) equal to zero.

B) maximized.

C) unchanged from what it is with a single-price monopoly.

D) unchanged from what it is in a perfectly competitive industry.

E) not zero but is less than with a single-price monopoly.

 

35) With perfect price discrimination, the quantity of output produced by a monopoly is ________ the quantity produced by a perfectly competitive industry.

A) greater than but not equal to

B) less than

C) equal to but not greater than

D) not comparable to

E) either greater than or equal to