Question 1

One solution to the problems of marginal-cost pricing of a regulated natural monopolist is average cost pricing.In this model,the monopolist is allowed to price its production at average total cost.How does average-cost pricing differ from marginal-cost pricing? Does this solution maximize social well-being?

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Question 2

In many countries,the government chooses to "internalize" the monopoly by owning monopoly providers of goods and services.(In some cases these firms are "nationalized," and the government actually buys or confiscates firms that operate in monopoly markets).What would be the advantages and disadvantages of such an approach to ensure that the "best interest of society" is promoted in these markets? Explain your answer.

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Question 3

Give some examples of the benefits and costs of antitrust laws.

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Question 4

What are the four ways that government policymakers can respond to the problem of monopoly?

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Question 5

One example of price discrimination occurs in the publishing industry when a publisher initially releases an expensive hardcover edition of a popular novel and later releases a cheaper paperback edition.Use this example to demonstrate the benefits and potential pitfalls of a price discrimination pricing strategy.

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Question 6

Why might economists prefer private ownership of monopolies over public ownership of monopolies?

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Quiz 15: Monopoly.

Give some examples of the benefits and costs of antitrust laws.

What are the four ways that government policymakers can respond to the problem of monopoly?

Why might economists prefer private ownership of monopolies over public ownership of monopolies?