Question 1

Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. Which of the following conditions of price discrimination explains why this occurs?

Accepted Answer

The answer of Children are charged less than adults for...

Question 2

Which of the following conditions is not required for price discrimination?

Accepted Answer

For price discrimination to be effective, it is not necessary for buyers with different elasticities to be physically separate from each other. Market segmentation can be based on other factors such as age, time of purchase, or quantity bought, rather than physical separation.

Question 3

If a pure monopolist can price discriminate by separating buyers into two or more groups,

Accepted Answer

Price discrimination allows a monopolist to charge different prices to different groups of consumers, effectively creating separate markets with their own demand curves. This results in multiple marginal revenue curves, one for each segmented group, rather than a single marginal revenue curve for the entire market.

Question 4

Other things equal, in which of the following cases would economic profit be the greatest?

Accepted Answer

An unregulated monopolist that can engage in price discrimination can capture more consumer surplus by charging different prices to different consumers based on their willingness to pay, leading to greater economic profit compared to other scenarios listed.

Question 5

If a monopolist engages in price discrimination, it will

Accepted Answer

Price discrimination allows a monopolist to charge different prices to different customers based on their willingness to pay. By charging a higher price where demand is inelastic and a lower price where demand is elastic, the monopolist can increase its profit by capturing more consumer surplus.

Question 6

Price discrimination is

Accepted Answer

Price discrimination is considered illegal only if it is used in a way that lessens or eliminates competition, according to antitrust laws.

Question 7

Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, it should charge prices of

Accepted Answer

The answer of  Assume the figure applies to a...

Question 8

Based on the accompanying table, this nondiscriminating pure monopolist should set its price at

Accepted Answer

The answer of  Based on the accompanying table, this...

Question 9

Which of the following is not a precondition for price discrimination?

Accepted Answer

Price discrimination does not require the commodity to be a durable good. It primarily depends on the seller's ability to segment the market, prevent resale, and possess some degree of market power.

Question 10

Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. This pricing system occurs because

Accepted Answer

The seller can control who uses the game tickets, ensuring children pay the lower price, but cannot control who consumes concession items, so prices remain the same for all.

Question 11

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how many units will the firm produce?

Accepted Answer

The answer of  If the profit-maximizing pure monopolist whose...

Question 12

The graphs represent the demand for use of a local golf course for which there is no significant competition. (It has a local monopoly.)P denotes the price of a round of golf, and Q is the quantity of rounds "sold" each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, this profit-maximizing golf course should

Accepted Answer

The answer of  The graphs represent the demand for...

Question 13

The graphs represent the demand for use of a local golf course for which there is no significant competition. (It has a local monopoly.)P denotes the price of a round of golf, and Q is the quantity of rounds "sold" each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, then over the course of a full seven-day week, this price-discriminating, profit-maximizing golf course should sell a total of

Accepted Answer

The answer of  The graphs represent the demand for...

Question 14

At its profit-maximizing output, the nondiscriminating pure monopolist whose information is in the accompanying table

Accepted Answer

The answer of  At its profit-maximizing output, the nondiscriminating...

Question 15

A price discriminating pure monopolist will attempt to charge each buyer (or group of buyers)

Accepted Answer

A price discriminating pure monopolist aims to maximize profits by charging each buyer the maximum price they are willing to pay, rather than a single price for all buyers. This strategy does not necessarily relate to differences in product characteristics, per unit cost constancy, or the buyer's marginal cost.

Question 16

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how much profit will the firm earn?

Accepted Answer

The answer of  If the profit-maximizing pure monopolist whose...

Question 17

The practice of price discrimination is associated with pure monopoly because

Accepted Answer

Monopolists have the ability to control output and price due to the lack of competition in their market, allowing them to engage in price discrimination by charging different prices to different consumers for the same product, based on their willingness to pay.

Question 18

The graphs represent the demand for use of a local golf course for which there is no significant competition. (It has a local monopoly.)P denotes the price of a round of golf, and Q is the quantity of rounds "sold" each day. If the left graph represents the demand during weekdays and the right graph the weekend demand, this profit-maximizing golf course will earn how much economic profit over the course of a full seven-day week?

Accepted Answer

The answer of  The graphs represent the demand for...

Question 19

Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, its profit-maximizing level of output will be

Accepted Answer

The answer of  Assume the figure applies to a...

Question 20

Based on the accompanying table, how many units would the given profit-maximizing nondiscriminating pure monopolist produce?

Accepted Answer

The answer of  Based on the accompanying table, how...

Quiz 12: Pure Monopoly

Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. Which of the following conditions of price discrimination explains why this occurs?

Which of the following conditions is not required for price discrimination?

If a pure monopolist can price discriminate by separating buyers into two or more groups,

Other things equal, in which of the following cases would economic profit be the greatest?

If a monopolist engages in price discrimination, it will

Price discrimination is

Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, it should charge prices of

Based on the accompanying table, this nondiscriminating pure monopolist should set its price at

Which of the following is not a precondition for price discrimination?

Children are charged less than adults for admission to professional baseball games but are charged the same prices as adults at the concession stands. This pricing system occurs because

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how many units will the firm produce?

At its profit-maximizing output, the nondiscriminating pure monopolist whose information is in the accompanying table

A price discriminating pure monopolist will attempt to charge each buyer (or group of buyers)

If the profit-maximizing pure monopolist whose information is in the accompanying table is able to price discriminate, charging each customer the price associated with each given level of output, how much profit will the firm earn?

The practice of price discrimination is associated with pure monopoly because

Assume the figure applies to a pure monopolist and that MC is the same for both graphs. If this firm is able to price discriminate between children and adults, its profit-maximizing level of output will be

Based on the accompanying table, how many units would the given profit-maximizing nondiscriminating pure monopolist produce?