Quiz 6 Answers - ECO 304K: INTRODUCTION TO MICROECONOMICS...

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ECO 304K: INTRODUCTION TO MICROECONOMICS Unique # 33645, Fall 2009, Prof. Wiseman Quiz 6 Select the single best answer for each question. 1. Which of the following is not a way by which the deadweight loss of a monopoly can be reduced? A. Competition from substitute goods: The development of man-made diamonds to compete with earth-made diamonds B. The threat of competition: A fitness center is considering charging very high membership dues and serving only fitness buffs but fears that this strategy would leave a large market opening for a gym geared toward the general public C. The ability to practice price discrimination: A movie theater charges $4 for matinee shows and $10 for evening shows D. Laws that create a minimum price for the good at a price higher than what the monopoly had been charging 2. Why is a monopolist able to earn long run profit, unlike perfectly competitive firms, which do not earn long run profit? A. Being the only producer, a monopolist can charge any price and sell any quantity it likes
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This note was uploaded on 02/14/2010 for the course ECO 304K taught by Professor Hickenbottom during the Spring '10 term at University of Texas at Austin.

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Quiz 6 Answers - ECO 304K: INTRODUCTION TO MICROECONOMICS...

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