Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing?

Policymakers can regulate prices that the monopoly charges.

Antitrust laws have economic benefits that outweigh the costs if they

prevent mergers that would decrease competition and raise the costs of production.

Bob's Butcher Shop is the only place within 100 miles that sells bison burgers. Assuming that Bob is a monopolist and maximizing his profit, which of the following statements is true?

The price of Bob's bison burgers will exceed Bob's marginal cost.

In a natural monopoly,

if the government requires marginal cost pricing, it will likely have to subsidize the firm.

A natural monopoly occurs when

there are economies of scale over the relevant range of output.

For a firm to price discriminate,

it must have some market power.

can maximize profits if the seller can prevent the resale of goods between customers.

Suppose most people regard emeralds, rubies, and sapphires as close substitutes for diamonds. Then DeBeers, a large diamond company, has

less market power than it would otherwise have.

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Chapter 15 econ

Question	Answer
Which of the following governmental actions would eliminate some or all of the inefficiency that results from monopoly pricing?	Policymakers can regulate prices that the monopoly charges.
Antitrust laws have economic benefits that outweigh the costs if they	prevent mergers that would decrease competition and raise the costs of production.
Bob's Butcher Shop is the only place within 100 miles that sells bison burgers. Assuming that Bob is a monopolist and maximizing his profit, which of the following statements is true?	The price of Bob's bison burgers will exceed Bob's marginal cost.
In a natural monopoly,	if the government requires marginal cost pricing, it will likely have to subsidize the firm.
A natural monopoly occurs when	there are economies of scale over the relevant range of output.
For a firm to price discriminate,	it must have some market power.
When regulators use a marginal-cost pricing strategy to regulate a natural monopoly, the regulated monopoly	will experience a loss.
Price discrimination	can maximize profits if the seller can prevent the resale of goods between customers.
Which of the following can defeat the profit-maximizing strategy of price discrimination?	Arbitrage
The collection of statutes aimed at curbing monopoly power is called	antitrust law.
Refer to Figure 15-7. To maximize total surplus, a benevolent social planner would choose which of the following outcomes?	Q = 45 and P = 45
Suppose most people regard emeralds, rubies, and sapphires as close substitutes for diamonds. Then DeBeers, a large diamond company, has	less market power than it would otherwise have.

Created by: jmccrar1145

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