Monopoly Market

monopoly has two key features, which are

• barriers to entry and no close substitutes.

• franchises and barriers to entry.

• barriers to entry and close substitutes.

• close substitutes and no barriers to entry.

An example of a monopoly is

• a big city restaurant.

• the stock market.

• the only veterinarian in an isolated farm community.

• PPUM

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

• upward sloping.

• downward sloping.

• horizontal.

• vertical.

Which of the following is a characteristic of a single-price monopoly?

• The firm is a price taker.

• Demand is perfectly elastic.

• There are many close substitutes for the firm's product.

• The market price exceeds marginal revenue.

For a single-price monopolist, marginal revenue is less than price because

• the revenue gain from the last unit sold is offset by a revenue loss on the units that previously had been sold at a higher price.

• the revenue gain from the last unit sold is offset by further gains in price on units not sold at all.

• total revenue always decreases as output increases.

• the price does not have to be lowered on all previous units sold.

A major difference between a single-price monopolist and a perfectly competitive firm is that the

• monopolist can maximize profit by setting the price of the output where demand is inelastic.

• monopolist can always increase its profits by increasing the price of its output.

• monopolist's marginal revenue is less than price.

• monopolist is guaranteed to earn an economic profit.

In the monopoly, the firm's marginal revenue curve is ________, while in a perfectly competitive market, each firm's marginal revenue curve is ________.

• downward sloping; horizontal

• horizontal; downward sloping

• upward sloping; horizontal

• downward sloping; upward sloping

Christy's Haircuts, the sole supplier of haircuts in a small town, faces the demand schedule shown in the table above. What is Christy's marginal revenue from the 25th haircut?

• zero

• $5

• $7

• $5.50

For a single-price monopoly, marginal revenue is ________ when demand is elastic and is ________ when demand is inelastic.

• negative; negative

• negative; positive

• positive; negative

• positive; positive

Which of the following is TRUE of a monopoly?

• It can always increase its revenue by increasing the price to its customers.

• It will always operate somewhere along the inelastic portion of the demand curve.

• Its marginal cost curve is always downward sloping.

• None of above