The Basics of Monopoly (Lecture)

Multiple Choice

What is the main goal of the game Monopoly?

• To collect the most properties

• To make all other players go bankrupt

• To build the most hotels

• To finish the game first

Open Ended

Do you think the word "Monopoly" is a good name for the board game? Why or why not?

Multiple Choice

Which company is given as an example of a firm that controls over 95% of its market, but still has some competition?

• Microsoft

• Apple

• Google

• Amazon

Multiple Select

Which of the following are characteristics of a monopoly?

• One seller

• No substitutes

• Many buyers and sellers

• High barriers to entry

Multiple Choice

What is true about a monopoly?

• no control over price

• some control over price

• control over price

Open Ended

Explain how De Beers is able to influence the price of diamonds in the market.

Multiple Choice

Which of the following is an example of government involvement as a barrier to entry in a monopoly?

• Issuing patents and copyrights

• Controlling scarce resources

• Setting low prices

• Technological innovation

Multiple Select

Which of the following are barriers to entry that can help maintain a monopoly?

• Control of a resource

• Technological superiority

• Government involvement

• Economies of Scale

Match

Match the types of monopolies.

• If there is only one store in a location.

• When a firm has a technological edge in the short run.

• When the government creates a monopoly.

• When 1 company can produce more efficiently than 2 companies competing.

geographic monopoly

technological monopoly

government monopoly

natural monopoly

• geographic monopoly

• technological monopoly

• government monopoly

• natural monopoly

Multiple Choice

What does it mean when a monopolist is described as a 'price maker'?

• The monopolist can set the price to maximize profits.

• The monopolist must accept the market price.

• The monopolist cannot influence the price.

• The monopolist always charges the lowest price.

Fill in the Blanks

When a monopolist increases price above the competitive level, he/she is using

power.

Multiple Choice

Based on the diagrams and explanations, how does a monopolist use market power to affect price and quantity compared to a perfectly competitive firm?

• A monopolist restricts output and raises price above the competitive level.

• A monopolist increases output and lowers price below the competitive level.

• A monopolist matches the output and price of a perfectly competitive firm.

• A monopolist cannot influence output or price.