ECON 2G03 Study Guide - Final Guide: Bertrand Competition, Subgame Perfect Equilibrium, Demand Curve
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9 May 2016
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16. A monopoly will set the price
at the highest price along the demand it faces. |
equal to the value at which marginal cost intersects the demand curve. |
so that it can sell the quantity at which marginal revenue is equal to marginal cost. |
so that it can sell the quantity at which marginal revenue is equal to zero. |
17.
A monopolist will always end up choosing to operate
even if its profit are negative. |
on the elastic portion of the demand it faces. |
until such time as a new competitor enters its market. |
only if it can capture the entire consumer surplus. |
18.
When first-degree price discrimination is perfectly implemented social gain is maximized, with all gains going to the monopoly.
True |
False |
19.
Which of the following is the best example of second-degree price discrimination?
A car salesman attempts to discover and charge the highest price that the customer is willing to pay. |
A sub sandwich shop that gives you a half-price sandwich for every six sandwiches you purchase. |
Manufacturersâ use of discount coupons printed in Sunday newspapers. |
Polaroid cameras and film. |
20.
Third-degree price discrimination occurs when a monopoly separates its customers into distinct markets, charging a different price to each group.
True |
False |