If a monopoly can perfectly price discriminate,
A) all the demanders pay one price.
B) it minimizes its profit.
C) it produces the same amount of output as would be produced if the market was a perfectly competitive industry.
D) it produces less output than would be produced if the market was a perfectly competitive industry.
E) it creates the same amount of consumer surplus as would be created if the market was a perfectly competitive industry.
C
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Combine a graph showing the interest parity condition and one showing money demand and supply to demonstrate simultaneous equilibrium in the money market and the foreign exchange market. How would an increase in the U.S
money supply affect the Dollar/Euro exchange rate and the U.S. interest rate? Illustrate your answer graphically and explain.
A monopoly is MOST likely to be temporary if the monopoly power is derived from:
A) high barriers to entry. B) a lack of substitutes for the monopolist's product. C) economies of scale. D) technological change.
The quantity equation is always true because it:
A. has been empirically tested. B. is a law of economics. C. is the definition of velocity rewritten. D. has been historically verified.
Exhibit 13-3 A monopolist
In Exhibit 13-3, if this industry is regulated and the regulatory commission wants revenue to just cover cost, the proper price and output combination to be set is:
A. price = $10; output = 25. B. price = $8; output = 30. C. price = $5; output = 40. D. price = $4; output = 25.