Chapter 15-Kumar

29 December 2022
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Which of the following is NOT a characteristic of a monopoly?
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One buyer
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A monopoly market is characterized by
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Barriers to entry
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Which of the following is NOT a reason for the existence of a monopoly ?
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Of scale
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A firm that is the sole seller of a product without close substitutes is
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A monopolist
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Most markets are not monopolies in the real world because
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There are reasonable substitutes for most goods
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A fundamental source of monopoly market power arises from
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Barriers to entry
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Patents, copyrights and trademarks
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Government created monopolies, barriers to entry , and owners charger higher prices
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Patent and copyright laws encourage
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Creative activity, and research and development
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Which of the following is a characteristic of a natural monopoly ?
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Average total cost declines over large regions of output
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Which of the following is a characteristic of a natural monopoly ?
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Average cost exceeds marginal cost, increase number of firms will increase firms average total cost, one firm can supply output at a lower cost than two firms
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The market demand curve for a monopolist is typically
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Downward sloping
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In order to sell more of it's product, a monopolist must
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Lower it's price
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A monopoly firm is a price
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Maker and has no supply curve
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For a monopoly firm, which of the following equalities is always true?
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Price=average revenue
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For a monopoly
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Average revenue exceeds marginal revenue
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Marginal revenue can become negative for
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Monopoly firms but not for competitive firms
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A monopolist can sell 200 units of outputs for 36$. It can sell 201 units of output for 35.80$. The marginal revenue of the 201st unit of output is
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-4.20$
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The deadweight loss associated with a monopoly occurs because the monopolist
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Produces an output level less than socially optimal level
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Monopolies are inefficient because they
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Restrict output below the socially efficient level of production
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The social cost of a monopoly is equal to it's
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Deadweight loss
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Monopolies are socially inefficient because the price they charge is
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Above marginal cost
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The socially efficient level of production occur where the marginal cost curve intersects
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Demand
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For a monopoly, the socially efficient level of output occurs where
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Average revenue equals marginal cost
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When a monopolist is able to sell it's product at a different prices
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Price discrimination
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The practice of selling the same good to different customers at different prices, but with the same marginal cost
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Price discrimination