Monopoly

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

Unlike perfect competition, a monopolist can make abnormal profits in the long run.

• True

• False

Buying "adidasy" is a form of

• legal barrier

• economies of scale

• brand loyalty

• anti-competitive behavior

What is it that ultimately limits a monopolist?

• Nothing.

• The demand curve for their product.

• The government.

Monopolist can control

• price

• output

• both

Monopolists are price takers.

• True

• False

A monopoly is the sole seller of a product with no close substitutes.

• True

• False

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 

Compared to a perfectly competitive industry with the same demand and cost curves, a monopoly’s price and quantity will be which of the following? 

• P=Higher; Q=Same
• P=Lower; Q=Same
• P=Lower; Q=Higher
• P=Higher; Q=Lower

A monopolist introduces a technological innovation that lowers the marginal cost and average cost of production. The price of the good and the quantity are most likely to change in which of the following ways? 

• P=Decrease; Q=Increase
• P=Decrease; Q=Decrease
• P=Increase; Q=Increase
• P=Increase; Q=Decrease