Suppose that a price-discriminating monopolist divides its market into two segments. In each market segment, price is determined by finding the level of output where that market's
a. average revenue equals average total cost
b. average revenue equals average variable cost
c. marginal revenue equals average total cost
d. marginal revenue equals marginal cost
e. marginal cost equals average total cost
QUESTION 2As concentration in an industry increases, the Herfindahl index falls.
a. True
b. False
QUESTION 3Suppose, as a result of a long-run adjustment in a perfectly competitive industry to a change in demand, price and output both rose. Therefore, demand must have __________ in this __________ industry
a. fallen; increasing cost
b. fallen; decreasing cost
c. increased; increasing cost
d. increased; decreasing cost
e. decreased; constant cost
QUESTION 4Suppose that a price-discriminating monopolist divides its market into two segments. If the firm sells its product for a price of 42 in the market segment where demand is relatively less elastic, the price in the market segment whose customers' demand is more elastic will be
a. 42
b. greater than 42
c. less than 42
d. less than marginal revenue in that market segment
e. equal to marginal revenue in that market segment
QUESTION 5As concentration in an industry increases, the value of the Herfindahl index falls.
a. True
b. False
QUESTION 6Suppose, as a result of a long-run adjustment in a perfectly competitive industry to a change in demand, price and output both fell. Therefore, demand must have __________ in this __________ industry.
a. fallen; increasing cost
b. fallen; decreasing cost
c. increased; increasing cost
d. increased; decreasing costs
e. decreased; constant cost
QUESTION 7Price-discriminating, profit-maximizing monopolists charge higher prices to buyers who have more elastic demand curves.
a. True
b. False
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