Econ Qbank Ch19

NSS Exploring Economics 4

Chapter 19 Monopoly pricing

Questions

P.2
Think it over
1.
Why does Microsoft not lower its price for Windows so that more people can use its software products?

2.
The MTR charges students a lower fare. Do you know why?

P.3
Discuss
19.1
Which private companies can be regarded as monopolists in Hong Kong? Do they charge higher prices? What do you mean by ‘higher prices’? Higher than what levels?

P.7
Test yourself
19.1
Given the following information, find the total revenue and marginal revenue at different output levels:
|Price ($) |Output (units) |TR ($) |MR ($) |
|50 |1 | | |
|40 |2 | | |
|30 |3 | | |
|20 |4 | | |
|10 |5 | | |

P.9
Test yourself
19.2
Given the following information, find the average cost and marginal cost at different output levels:
|Output (units) |TC ($) |AC ($) |MC ($) |
|0 |10 |－ |－ |
|1 |20 | | |
|2 |25 | | |
|3 |30 | | |
|4 |40 | | |
|5 |60 | | |

P.14
Test yourself
19.3
Explain if the following statements are true, false or uncertain.
a. ‘Average revenue and marginal revenue of a monopolist must be greater than zero.’
b. ‘A monopolist must produce at the output level where MR = MC.’

19.4
Given the following information about a monopolist in the long run,