Week 8

What is a monopoly?

• A firm that produces a good or service with no close substitute.

• A firm that produces a new good or service.

• A firm that efficiently produces goods and services.

• A firm that is larger in size than other firms.

Which of these is true about monopolies?

• Monopolies often compete with other powerful firms.

• Power lies in the hands of monopolies which can charge higher prices without losing sales.

• Monopolies have the power to force people to buy whatever they want.

• You can own Park Place and the Boardwalk.

Which of these is the polar opposite of a monopoly?

• Cartel

• Duopoly

• Oligopoly

• Perfect Competition

Which of these does not lead to a form of a monopoly?

• Legal restrictions

• Economies of Scale

• Control of Resources

• Perfect Competition

Basically, no matter what causes the monopoly to exist, it all can be summarized as _____________ .

• low barriers to entry

• high barriers to entry

• low barriers to exit

• high barriers to exit

A monopolistic company may want to ________________.

• keep prices low to avoid regulation

• keep prices high to avoid regulation

• keep prices high to encourage competition

• keep prices low to encourage competition

A de jure monopoly is another way of saying a ____________.

• legal monopoly

• by chance monopoly

• natural monopoly

• monopoly occurred by controlling resources

Patents are temporary monopolies given by government to

• inventors when they create a new product.

• creative artists when they write a new song.

• authors when they write a new book or poem.

• designers when they create a unique logo.

A copyright gives the holder a(n)

• exclusive right to copy and sell.

• exclusive right to buy in a marketplace.

• temporary ability to write freely without censorship.

• protection against those who came up with original ideas.

Which of these is not an example of an intellectual property right?

• patent

• copyright

• trademark

• factory or farm