1. Unlike a perfectly competitive firm a monopoly has a downward sloping demand curve. Explain what this means in terms of the relationship between the various prices it could set and the varying quantities of output it could produce at those prices.
2. Identify the two criteria necessary for a firm to be a monopoly.
3. A monopoly that must sell each unit of output at the same price to all of its customers is called?
4. Define the economic term 'price discrimination' and give two examples of its use.
5. Explain why a monopolist would engage in price discrimination incorporating the concept of consumer surplus into your answer. Give a specific example not just a general answer.
6. Use the chart below to answer this question. Blue Rose Inc. is the only flower grower to have cracked the secret of making a blue rose. Figure 12.3 shows the demand for blue roses, the marginal cost of producing a blue rose, and the marginal revenue for each additional blue rose produced. A) What is Blue Rose's profit-maximizing output? B) What price does Blue Rose charge C) and is it efficient?
7. Define the meaning of deregulating an industry and give a brief explanation as to why the government might regulate an industry in the first place.