1. Perennial losers are the only group within “the baseball fraternity” who you would expect to support competitive balance.

True

False

2. Natural monopolies are distinguished by

A. Zero fixed costs

B. Increasing average total costs (ATC) over the entire range of output

C. Decreasing average total costs (ATC) over the entire range of output

D. The existence of only one firm in the industry

3. Price discrimination:

A. Reduces deadweight loss

B. Creates mutually-beneficial exchanges that would not happen under a single-price scheme

C. Increases consumer surplus

D. Both “a” and “b”

4. The true cost of monopoly power to society is attributable to:

A. the higher price that consumers must pay.

B. the reduction in output by the monopolist.

C. the excess profits enjoyed by the monopolist.

D. the failure of other firms to enter the industry.