ScienceEconomicsEcon ch 15
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Econ ch 15

Helen Coleman avatar Helen Coleman
26 August 2023
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a monopoly is a seller of a product
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without a close substitute
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a monopoly is characterized by all of the following except
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there are a few sellers in each selling unique product
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monopoly is characterized by
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entry barriers market power no close substitutes
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A monopoly faces
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a downward-sloping demand curve
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characteristics that an oligopoly and monopoly share
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a market structure with barriers to entry firm can reap long run profits
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a narrow definition of monopoly is that a firm is a monopoly if it can ignore
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the actions of other firms
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a monopoly can
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brake even in the long run
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a monopoly status could
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be temporary
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a monopoly can make
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profits in the long run
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government grant patents to
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compensate firm for research and development costs
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network externalities
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exists when the usefulness of a product increase with the number of consumers who use it
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a natural monopoly is most likely to occur in which of the following industries?
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an industry where fixed costs are very large relative to variable cost
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if a restaurant was a natural monopoly, dividing the restaurant equally into two separate restaurants would
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raise average total cost
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the demand curve for the monopoly's product is
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the market demand for the products
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a monopolist's profit maximizing price and output corresponds to the point on a graph
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where MR=MC and charging the price on the market demand curve for the output
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Because a monopoly's demand curve is the same as the market demand curve for its production
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the monopoly must lower to sell more of its product
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if a theatre company expects 250,00 in a ticket revenue from face performances and 288,000 in tickets rev if its adds a sixth performance, the
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the marginal revenue of the sixth performance is 38000
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if a monopolist's price is 50 per unit and its marginal cost is 25, then
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not information is given to say what the firm should do to maximize profit
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firms that face downward-sloping demand curve for their output in the product market are called q
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price makers
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which of the following is true for a monopolist?
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being the only seller in the market, the monopolist faces the market demand curve
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economic efficiency in a free market occurs when
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the sum of consumers surplus and producers surplus is maximized
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why do monopoly cause a deadweight loss?
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because it does not produce some output for which marginal benefits exceeds marginal cost
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relative to a perfect competitive market, a monopoly results in
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a gain in producer surplus less than the loss in consumer surplus
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a monopoly will produce less and charge a higher price than
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would perfectly competitive industry producing the same good
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under a perfectly competitive conditions, economic surplus is maximized. Under monopoly conditions economic surplus is
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less than under perfect competition and there is deadweight loss
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the size of a deadweight loss in a market is reduced by
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market price being close to the marginal cost
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a possible advantage of a horizontal merger for the economy is that
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economies of scale
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a natural monopoly regularly commission sets a price where marginal cost equals to demand
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the firm would incur loss
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in regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one set of price
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equal to average total cost where it intersects the demand curve