Name/I.D. Number: Chapter 10 or 23 Monopoly: Pre-Class " In-Class Activities Packet 'art 2. Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block (upper) case letter of your choice under Section._ Date: olumn "A" and match the definitions in column "B" with the meanings or examples or real world applications in column "C" by writing the small ower) case letter of your choice under column "B". Column "A" 1. Monopoly Column " B" Column "C" A. A price structure in which the seller charges a uniform price per unit a. The art of making money by taking advantage of the 2. Public Franchise for one specific quantity, a lower price for an additional quantity & so on opportunity created to buy low & then sell high. B. The net value (value to buyers over and above costs to suppliers) of 3. Natural Monopoly 1. A pricing strategy aimed at charging different prices to the difference between the competitive quantity of output different consumers or geographical location. (where P = MC) and the monopoly quantity of output (where P > MC); 4. Price Searcher C. The welfare loss to society as a result of not producing the the loss of not producing the competitive quantity of output. level of efficient output or due to market inefficiencies that ub C. A price structure in which the seller charges different prices for the 1exist under monopoly. 5. Deadweight Loss product it sells and the price differences do not reflect cost differences. d. A pricing strategy based on the number of units sold. For D. Actions of individuals and groups who spend resources to influence example, retail pricing versus whole sale pricing. of Monopoly public policy in the hope of redistributing (transferring) income to e. An inefficient outcome created by the inability to reduce costs associated with monopoly production due to lack of 6. Rent Seeking themselves from others. competition. E. A price structure in which the seller charges the highest price that . The action of lobbyists hired to influence public policy in 7. X-Inefficiency each consumer is willing to pay for the product rather than go without it. favor of certain organized groups or to maintain industry F. The increase in costs due to the organizational slack in a monopoly wide interest. 8. Price Ea resulting from the lack of competitive pressure to push costs down to g. A pricing strategy adopted by a monopolist where every consumer pays what she/he is willing and able to pay for a Discrimination their lowest possible level. & A theory of market structure based on three assumptions: There is given product. Also known as "skim pricing". one seller, it sells a product that has no close substitutes, and the h. A situation whereby the seller charges different prices to 9. Perfect Price different consumers unjustified on the basis of cost barriers to entry are extremely high. differences. Discrimination H. Buying a good at a low price and selling it for a higher price. i. A monopolist who has control over the supply of a product A price structure in which the seller charges different prices in & capable of charging what ever price shelhe wishes to 10. Second-Degree different markets or charges different prices to various segments of the charge. buying population. jA type of monopoly allowed by the government due to its Price Discrimination large scale operations, lowest possible cost of production Ad A right granted to a firm by government that permits the firm to provide a particular good or service and that excludes all others from and the ease to do business. 11. Third-Degree K. The license issued by a government unit to a business doing so. organization to have exclusive right to do business in its Price Discrimination K. The condition where economies of scale are so pronounced that only jurisdiction. one firm can survive. 1. A market structure dominated by a single firm that is A seller that has the ability to control to some degree the price of the capable of controlling its supply & capable of fixing the price 12. Arbitrage m of the product it sells. Ib product it sells. m
