Monopoly

An exclusive legal right as sole producer for 20 years granted to an inventor of a product is called a

Pure monopoly refers to

Which of the following statements is correct? -Both perfectly competitive and monopolistic firms are price takers. -Both perfectly competitive and monopolistic firms are price makers. -A perfectly competitive firm is a price taker, while a pure monopoly is a price maker. -A perfectly competitive firm is a price maker, while a pure monopoly is a price taker.

Which of the following best approximates a pure monopoly? -the foreign exchange market -the Kansas City wheat market -the only bank in a small town -the soft drink market

The demand curve faced by a pure monopoly is

A nondiscriminating pure monopoly must decrease the price on all units of a product in order to sell more units. This explains why

A nondiscriminating pure monopoly will find that marginal revenue

Suppose that a pure monopoly calculates that at its present output level, marginal revenue is $1 and marginal cost is $2. The monopoly could maximize profits or minimize losses by

Which of the following statements is a major criticism of a pure monopoly as a source of allocative inefficiency? -A pure monopoly fails to expand output to the level where the price of an additional unit is just equal to its marginal cost. -A pure monopoly has no incentive to produce efficiently, because even the inefficient pure monopoly can be assured of economic profits. -A pure monopoly will always generate economic profit, and that means that prices are too high. -A pure monopoly has an unfair advantage because it can purchase labor at a lower price than perfectly competitive firms can.

Which of the following statements about price discrimination is correct? -Successful price discrimination will provide the firm with lower total profits than if it did not discriminate. -Successful price discrimination will provide the firm with more total profits than if it did not discriminate. -Successful price discrimination will generally result in a lower level of output than would be the case under a single-price pure monopoly. -Successful price discrimination occurs when there are differences in the costs of producing for different groups of buyers.

One argument for having the government regulate natural monopolies is that without regulation

Natural monopolies result from