The Basics of Monopolies

by Kendrick Broadus

The Basics of Monopolies

Open Ended

Have you ever played the game monopoly?

Multiple Choice

What happens if you lose all your money?

• You ask for money.
• Good job, nice try, but you lose. Game over.

Multiple Choice

What is the objective of Monopoly?

• Move your token the most spaces.
• Become the wealthiest player through buying, renting, and selling property.
• Don't lose your money.
• Buy property.

Multiple Choice

One of the requirements for a monopoly is that

• products are high priced

• there are several close substitutes for the product

• there is a unique product with no close substitutes

• the product cannot be produced by small firms

Multiple Choice

Factors that make it difficult for new firms to enter a market are called

• Barriers to entry
• Factors of production
• Limited supply
• Monopolistic Outlook

Open Ended

What do you think is the greatest barrier to Market entry and w

Multiple Choice

Which of the following is NOT a major barrier to entry for a monopolist?

• control over resources

• patent protection/ technoligical superiority

• economies of scale

• product differentiation

Multiple Choice

Companies that possess market power are referred to as ____________.

• competitive firms

• identical firms

• price takers

• price makers

Multiple Choice

Which market has no competition?

• perfect competition
• oligopoly
• monopoly
• monopolistic competition

Multiple Choice

What law was first passed to address monopoly power?

• Sherman Antitrust Act

• Clayton Antitrust Act

• Pinkerton Antitrust Act

• Makerpeace Antitrust Act

Multiple Choice

A type of monopoly that arises because a single firm can supply a good or service to an entire market at a lower cost than could two or more firms.

• Monopoly

• Natural Monopoly

• Price Discrimination

• Cartel

Multiple Choice

If a monopolist wants to sell a larger quantity, it must

• set a higher price

• maintain the current price

• set a lower price

• implement new technology

Multiple Choice

A barrier to entry is

• an economic term for economies of scale

• illegal in most markets

• anything that prevents new firms from entering the market

• a factor that increases competition

Multiple Choice

A monopoly is a market with

• many suppliers

• no barriers to entry

• many substitutes

• one supplier

Multiple Choice

One of the requirements for a monopoly is that

• products are high priced

• there are several close substitutes for the product

• there is a unique product with no close substitutes

• the product cannot be produced by small firms

Multiple Choice

What is not an advantage of a monopoly?

• achieving economies of scale

• high level of research and development

• Producing a greater quantity at profit-maximizing level of output

• higher prices and lower output

Multiple Choice

Another term for monopoly during the period 1865-1900 was

• Big Business
• Trust
• Giant of Industry
• Forbes 500

Multiple Choice

A firm with market power engages in price discrimination to:

• earn a higher profit
  
• increase consumer surplus
  
• decrease deadweight loss
  
• make its demand more elastic 

Multiple Choice

Which is not a type of a legal barrier?

• patent

• excise

• trademark

• copyrights

Multiple Choice

A single-price monopoly is characterized by a marginal revenue curve that is

• upward sloping.

• downward sloping.

• horizontal.

• vertical.

Multiple Select

Monopolist can control

• price

• output

• both

Multiple Choice

An example of a monopoly is

• a big city restaurant.

• the stock market.

• the only veterinarian in an isolated farm community.

• PPUM

Multiple Select

Please check all that apply: Why are monopolies illegal?

• Leads to higher prices

• Inferior quality

• Reduced supply

Multiple Choice

What are the laws called that outlaw monopolies?

• Anti-monopoly

• Anit-big business

• Anti-trust

Multiple Choice

If a monopoly firm practices price discrimination the firm will _____________.

• earn smaller profit

• produce lower quantity than before price discrimination

• charge a higher price when demand is inelastic and a lower price when demand is elastic

• charge a higher price when demand is elastic and a lower price when demand is inelastic

Open Ended

List two (2) characteristics of monopoly firm.

Multiple Choice

Monopoly power is high when

• There are no close substitutes

• There are no rivals

• There is only a single seller of the product

• All of the above