Question :
51) Refer to Figure 12-3. Comparing the monopoly equilibrium to : 1384263
51) Refer to Figure 12-3. Comparing the monopoly equilibrium to the perfectly competitive equilibrium, the area representing the gain in producer surplus due to monopoly is outlined by
A) P1P3CA less ACE.
B) P2P3CB less ABE.
C) P0P3CA less ACE
D) P3P4 less ABE.
E) P2P4E.
52) Refer to Figure 12-3. Comparing the monopoly equilibrium to the perfectly competitive equilibrium, the area P2P3CB represents
A) the dead-weight loss of monopoly.
B) a redistribution of income from consumers to the monopolist.
C) the net gain in the monopolist’s profits.
D) the net loss in the monopolist’s profits.
E) a redistribution of income from the monopolist to the consumer.
53) Refer to Figure 12-3. Comparing the perfectly competitive equilibrium to the monopoly equilibrium, the deadweight loss of monopoly is given by
A) q1BEq2.
B) AP4E.
C) q1CEq2.
D) ACE.
E) P2P4E.
54) The deadweight loss of monopoly is
A) its fixed cost.
B) any negative profit due to cyclical decreases in demand.
C) the loss of economic surplus due to the low monopoly output level.
D) the cost of maintaining effective barriers to entry.
E) the extra administrative costs of operating a large firm.
55) Suppose we compare two monopolists with identical cost and demand conditions. Monopolist A charges a single price. Monopolist B engages in price discrimination, charging a different price for different units of the product. Which one of the following statements is correct?
A) B will produce less than A, resulting in a larger deadweight loss.
B) B will generally produce more than A, resulting in less deadweight loss.
C) A will produce less than B, resulting in smaller deadweight loss.
D) A will produce more than B, resulting in larger deadweight loss.
E) A and B will both produce the same amount.
56) Allocative efficiency occurs when
A) producer surplus is maximized.
B) consumer surplus is maximized.
C) the sum of consumer and producer surplus is maximized.
D) the economy achieves the frontier of the production possibilities boundary.
E) deadweight loss is achieved.
57) In general, the sum of consumer and producer surplus is maximized under the conditions of
A) perfect competition.
B) monopoly.
C) monopolistic competition.
D) oligopoly.
E) any market structure.
58) Which of the following is the result of a monopolist’s pricing and output behaviour, as compared to a perfectly competitive outcome?
A) a reduction in producer surplus and increase in consumer surplus
B) an increase in both consumer and producer surplus
C) a reduction in both consumer and producer surplus
D) a reduction in the sum of consumer and producer surplus
E) an increase in the sum of consumer and producer surplus
59) When comparing a monopoly equilibrium to a competitive market equilibrium, the consumer suffers two types of losses. They are
A) the deadweight loss due to the output that is produced beyond the competitive level, and the transfer of consumer surplus to the monopolist
B) the loss of both consumer surplus and producer surplus.
C) a loss of consumer surplus due to the output that is not produced, and the transfer of consumer surplus to the monopolist.
D) the deadweight loss due to the output that is produced and the reduced incentive for innovation by the monopolist.
E) the deadweight loss due to the output that is not produced and the transfer of producer surplus to the monopolist.
60) Refer to Figure 12-5. Allocative efficiency occurs
A) at output level Q3.
B) at output level Q1.
C) at price P1 and output Q3.
D) at price P2 and output Q2.
E) where the areas 1, 2, 3, and 4 are maximized.
