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1. Milus is a monopolist firm that begins to engage in perfect price discrimination where previously it charged a single price for all its customers, what would be true of its production figures?

a. The firm reaches allocative efficiency; producer surplus decreases; consumer surplus increases.

b. The firm loses allocative efficiency; charges lower price; deadweight loss decreases.

c. The firm produces more; total economic surplus increases; consumer surplus disappears.

d. The firm produces less; charges higher price; economic surplus decreases .

e. The firm produces more; producer surplus increases; deadweight loss increases.

f. None of the above.

2. In Taurus, an oligopoly market, the barriers to entry are ....... and the number of firms is relatively ..........

a. None of the above.

b.irrelevant; high

c. low; low

d. high; high

e. low; high

f. irrelevant; irrelevant

g. high; low

3. Company T and Company R are each telecommunications manufacturers. Both companies manufacture the same products, and they make their decisions based on the other's actions. Both companies are considering opening retail outlets to increase their profits. The payoff matrix shows the profits of the companies in millions of dollars if they choose to open retail outlets.

Company R Company T Retail outlets No retail outlets Retail outlets $25, $25 $30, $15 No retail outlets $35, $35 $34, $20