True or False:
1. By imposing monetary and nonmonetary costs on monopolists, antitrust policies aim to reduce the profitability of monopoly.
2. Government regulation of monopolies aims to achieve the efficiency of large-scale production without permitting the monopolists to charge monopoly prices, which would reduce output.
3. With natural monopoly, the efficient, or optimal, output is one that produces zero economic profits for the producer where price equals marginal cost.
4. Any regulated business that produced for long at the optimal, or efficient, output would go bankrupt.
5. Under average cost pricing, a regulated monopoly is permitted to earn a normal return such as firms experience in perfect competition in the long run.
6. Price discrimination is possible only with monopoly or where members of a small group of firms follow identical pricing policies.
7. When different groups of customers have predictably different willingness to pay, a monopolist could earn higher profits by charging those different buyers different prices, if it could prevent resale of the product among customers.
8. Price differentials between groups will erode if reselling is easy, which is why price discrimination is usually limited to services and to some goods where it is inherently difficult to resell or where the producer can effectively prevent resale.