A monopolist’s profits with price discrimination will be lower than if the firm charged a single, profit-maximizing price.

A、that behaves like a monopolist.

B、of many firms that sell products that are close but not perfect substitutes.

C、of many firms that all sell the exact same product.

D、of a small number of firms that sell products that are close but not perfect substitutes.

?Read the following extract from an article about monopolistic competition, and the questions followed.

?For each question 15—20, mark one letter (A, B, C, or D) on your Answer Sheet for the answer you choose.

Is the outcome in a monopolistically competitive market desirable from the standpoint of society as a whole? Can policymakers improve on the market outcome? There are no simple answers to these questions.

One source of inefficiency is the markup of price over marginal cost. Because of the markup, some consumers who value the good at more than the marginal cost of production (but less than the price) will be deterred from buying it. Thus, a monopolistically competitive market has the normal deadweight loss of monopoly pricing.

Although this outcome is clearly undesirable compared to the first-best outcome of price equal to marginal cost, there is no easy way for policymakers to fix the problem. To enforce marginal-cost pricing, policymakers would need to regulate all firms that produce differentiated products. Because such products are so common in the economy, the administrative burden of such regulation would be overwhelming. Moreover, the regulating monopolistic competitors would entail all the problems of regulating natural monopolies. In particular, because monopolistic competitors are making zero profits already, requiring them [% lower their prices to equal marginal cost would cause them to make losses. To keep these firms in business, the government would need to help them cover these losses. Rather than raising taxes to pay for these subsidies, policymakers may decide it is better to live with the inefficiency of monopolistic pricing.

Another way in which monopolistic competition may be socially inefficient is that the number of firms in the market may not be the "ideal" one. That is, there may be too much or too little entry. One way to think about this problem is in terms of the externalities associated with entry. Whenever a new firm considers entering the market with a new product, it considers only the profit it would make. Yet its entry would also have two external effects: a) The product-variety externality: Because consumers get some consumer surplus from the introduction of a new product, there is a positive externality associated with entry; b) The business-stealing externality: Because other firms lose customers and profits from the entry of a new competitor, there is a negative externality associated with entry. Thus in a monopolistically competitive market, there are both positive and negative externalities associated with the entry of new firms. Depending on which externality is larger, a monopolistically competitive market could have either too few or too many products. Both of these externalities are closely related to the conditions for monopolistic competition. The former arises because a new firm would offer a product different from those of the existing firms. The latter arises because firms post a price above marginal cost and, therefore, are always eager to sell additional units. Conversely, because perfectly competitive firms produce identical goods and charge a price equal to marginal cost, neither of these externalities exists under perfect competition.

In the end, we can conclude only that monopolistically competitive markets do not have all the desirable welfare properties of perfectly competitive markets. That is, the invisible hand does not ensure that total surplus is maximized under monopolistic competition. Yet because the inefficiencies are subtle, hard to measure, and hard to fix, there is no easy way for public policy to improve the market outcome.

Who will be prevented from buying the good?

A．Some consumers who also estimate the value of the good at more than the marginal cost of production.

B．Some consumers who estimate the price of the good at more than the marginal cost of the production.

C．Some consumers who have a high opinion of the good at more than the marginal cost of the production.

D．Some consumers who estimate the worth of the good at more than the marginal cost of the production.

Is the outcome in a monopolistically (垄断地) competitive market desirable from the standpoint of society as a whole? Can policymakers improve on the market outcome? There are no simple answers to these questions.

One source of inefficiency is the markup (涨价) of price over marginal cost. Because of the markup, some consumers who value the good at more than the marginal cost of production (but less than the price) will be deterred (被阻止) from buying it. Thus, a monopolistically competitive market has the normal deadweight loss of monopoly .pricing.

Although tins outcome is clearly undesirable compared to the first-best outcome of price equal to marginal cost, there is no easy way for policymakers to-fix the problem. To enforce marginal-cost pricing, policymakers would need to regulate all firms that produce differentiated products. Because such products are so common in the economy, the administrative burden of such regulation would be overwhelming. Moreover, the regulating monopolistic competitors would entail all the problems of regulating natural monopolies. In particular, because monopolistic competitors are making zero profits already, requiring them to lower their prices to equal marginal cost would cause them to make losses. To keep these firms in business, the government would need to help them cover these losses. Rather than raising taxes to pay for these subsidies, policymakers may decide it is better to live with tile inefficiency of monopolistic pricing

Another way in which monopolistic competition may be socially inefficient is that the number of firms in the market may not be the "ideal" one. That is, there may be too much or too little entry. One way to think about this problem is in terms of the externalities associated with entry. Whenever a new firm considers entering the market with a new product, it considers only the profit it would make. Yet its entry would also have two external effects: a) The product-variety externality: Because consumers get some consumer surplus from the introduction of a new product, there is a positive externality associated with entry b) The business-stealing externality: Because other firms lose customers and profits from the entry of a new competitor, there is a negative externality associated with entry. Thus in a monopolistically competitive market, there are both positive and negative externalities associated with the entry of new firms. Depending on which externality is larger, a monopolistically competitive market could have either too few or too many products. Both of these externalities are closely related to the conditions for monopolistic competition. The former arises because a new firm would offer a product different from those of the existing firms. The latter arises because firms post a price above marginal cost and, therefore, are always eager to sell additional units. Conversely, because perfectly competitive firms produce identical goods and charge a price equal to marginal cost, neither of these externalities exists under perfect competition.

In the end, we can conclude only that monopolistically competitive markets do not have all the desirable welfare properties of perfectly competitive markets. That is, the invisible hand does not ensure that total surplus is maximized under monopolistic competition. Yet because the inefficiencies are subtle, hard to measure, and hard to fix, there is no easy way for public policy to improve the market outcome.

Who will be prevented from buying the good?

A．Some consumers who also estimate the value of the good at more than the marginal cost of production.

B．Some consumers who estimate the price of the good at more than the marginal cost of the production.

C．Some consumers who have a high opinion of the good at more than the marginal cost of the production.

D．Some consumers who estimate the worth of the good at more than the marginal cost of the production.

A、sell as much as he wants at the chosen price since he is the only seller.

B、increase price only if he is willing to reduce output sold.

C、increase the price of his output and still sell the same quantity.

D、increase the price of his output and the quantity sold at the same time.

A、price and quantity just as a monopoly does.

B、quantity but faces a horizontal demand curve just as a competitive firm does.

C、price but can sell any quantity at the market price just as an oligopoly does.

D、price and quantity based on the decisions of the other firms in the industry just as an oligopoly does.

Every country with a monetary system of its own has to have some kind of market in

which dealers in bills, notes, and other forms of short term credit can buy and sell. The money market" is a set of institutions or arrangements for handling what might be called wholesale transactions in money and short-term credit. The need for such facilities arises in

much the same way that a similar need does in connection with the distribution of any of the

products of a diversified economy to their final users at the retail level. If the retailer is to

provide reasonably adequate service to his customers, he must have active contacts with

others who specialize in making or handling bulk quantities of whatever is his stock in trade

The money market is made up of specialized facilities of exactly this kind. It exists for the

purpose of improving the ability of the retailers of financial services-commercial banks

savings institutions, investment houses, lending agencies, and even governments-to do their job. It has little if any contact with the individuals or firms who maintain accounts with these various retailers or purchase their securities or borrow from them.

 The elemental functions of a money market must be performed in any kind of modern economy, even one that is largely planned or socialist, but the arrangements in socialist countries do not ordinarily take the form. of a market Money markets exist in countries that use market processes rather than planned allocations to distribute most of their primary resources among alternative uses. The general distinguishing feature of a money market is that it relies upon open competition among those who are bulk suppliers of funds at any particular time and among those seeking bulk funds, to work out the best practicable distribution of the existing total volume of such funds.

 In their market transactions, those with bulk supplies of funds or demands for them.

rely on groups of intermediaries who act as brokers or dealers. The characteristics of these

middlemen, the services they perform, and their relationship to other parts of the financial system vary widely from country to country. In many countries there is no single meeting place where the middlemen get together, yet in most countries the contacts among all participants are sufficiently open and free to assure each supplier or user of funds that he

will get or pay a price that fairly reflects all of the influences (including his own) that are currently affecting the whole supply and the whole demand. In nearly all cases, moreover,

the unifying force of competition is reflected at any given moment in a common price (that

is, rate of interest) for similar transactions. Continuous fluctuations in the money market rates of interest result from changes in the pressure of available supplies of funds upon the market and in the pull of current demands upon the market

1、The first paragraph is mainly about()

A、the definition of money market

B、the constitution of a money market

C、the basic functions of a money market

D、the general feature of a money market

2、According to this passage, the money market()

A. provides convenient services to its customers

B has close contact with the individuals or firms seeking funds

C. maintains accounts with various retailers of financial services

D. is made up of institutions which specialize in handling wholesale monetary

transactions

3、Which of the following statements concerning money market is not true according to this passage?()

A Money market does not exist in planned economies

B. Money market has been established in some socialist countries

C Money market encourages open competition among bulk suppliers of funds

D. Money market relies upon market processes to distribute funds to final users

4、The author uses the example of middlemen to show()

A. market transactions are important in different countries

B. dealers are needed in doing business

C middlemen can play great role in different transactions and different countries

D middlemen in different countries have different actions in business

5、According to this passage()

A.brokers usually perform. the same kinds of services to their customers

B.brokers have little contact with each other

C.open competition tends to result in a common price for similar transactions at any

given moment

D.changes in the pressure of available supplies of funds upon market tend to maintain a

Balance.

听力原文：M: This is it. I know that it is smaller than you wanted, but it is one of the nicest apartments in the building.

W: Does it have three bedrooms?

M: No. There are two. The master bedroom is quite spacious though. Maybe you could let the children share the larger room, and you and your husband could use the smaller one.

W: I suppose that I could do that.

M: A three-bedroom apartment will be difficult to find.

W: Yes, I know. I have been looking for over a week. The few three-bedroom apartments that I have found are extremely expensive.

M: Well, the owner allows two children in this apartment.

W: Aren't you the owner?

M: No. I am the manager. I live here on the first floor of this building.

W: Oh, that's nice. You said that the rent would be $350 a month. Does that include anything?

M: Yes. It includes gas.

W: This sounds good. But before I sign a contract I would like my husband to see it.

M: Come by at six. I will still be in the office. I am sure that you are eager to move from the hotel, and if we get the paper work ont of the way tonight, you can move in tomorrow.

W: Oh, that would be wonderful.

(20)

A．The woman's husband.

B．The owner of the apartment.

C．The apartment manager.

D．The person who occupies the apartment now.

听力原文：M: This is it. I know that it is smaller than you wanted, but it is one of the nicest apartments in the building.

W: Does it have three bedrooms?

M: No. There are two. The master bedroom is quite spacious though. Maybe you could let the children share the larger room, and you and your husband could use the smaller one.

W: I suppose that I could do that.

M: A three-bedroom apartment will be difficult to find.

W: Yes, I know. Believe me; I have been looking for over a week. The few three-bedroom apartments that I have found are either extremely expensive or the owner won't allow children as tenants.

M: Well, the owner allows two children in this apartment complex.

W: Aren't you the owner?

M: No. I am the manager. I live here, too, on the first floor of this building.

W: Oh. That's nice. Then if anything gets broken'"

M: Just have a note on my door.

W: You said that the rent would be $ 350 a month. Does that include any of the utilities?

M: Yes. It includes gas. Your furnace and stove are gas, so, as you can imagine, your other utilities, electric and water are quite inexpensive.

W: This sound better and better. But before I sign a contract, I'd like my husband to see it.

M: Why not stop by with him this evening7

W: How late are you open? He doesn't get off work until five.

M: Come by at six. I will still be in the office. I'm sure that you are eager to move from the hotel, and if we get the paper work out of the way tonight, you can move in tomorrow.

W: Oh, that would be wonderful.

(23)

A．The woman's husband.

B．The owner of the apartment.

C．The apartment manager.

D．The tenant who occupies the apartment now.