ScienceEconomicsEconomics: Monopoly
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Economics: Monopoly

Quinto Cook avatar Quinto Cook
7 October 2022
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18 test answers

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question
Which of the following statements is correct?
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A competitive firm is a price taker, whereas a monopolist is a price maker.
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A monopoly...
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Can set the price it charges for its output but faces a downward-sloping demand curve so it cannot earn unlimited profits.
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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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The fundamental source of monopoly power is...
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Barriers to entry.
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Most markets are not monopolies in the real world because,
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Price is usually set equal to marginal cost by firms.
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Which of the following is not an example of a barrier to entry?
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An entrepreneur opens a popular new restaurant.
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A benefit to society of the patent and copyright laws is that those laws...
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Encourage creative activity.
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The defining characteristic of a natural monopoly is...
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Economies of scale over the relevant range of output.
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In order to sell more of its product, a monopolist must...
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Lower its prices.
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The supply curve for the monopolists,
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Does not exist
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In a market characterized by monopoly, the market demand curve is...
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Downward sloping.
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Because a monopolist must lower its price in order to sell another unit of output,
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Marginal revenue is less than price.
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For a monopolist, marginal revenue is,
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Less than price, whereas marginal revenue is equal to price for a perfectly competitive firm.
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A profit-maximizing monopolist will produce the level of output at which,
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Marginal revenue is equal to marginal cost
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Deadweight loss
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Marginal revenue is equal to marginal cost
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A monopoly is an inefficient way to produce a product because,
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It produces a smaller level of output than would be produced in a competitive market.
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The legislation passed by Congress in 1890 to reduce the market power of large and powerful "trusts" is called the...
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Sherman Act.
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If the government regulates the price that a natural monopolist can charge to be equal to the firm's average total cost, the firm will..
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Earn zero profit.