Monopoly

Monopoly has two key features, which are

• barriers to entry and close substitutes.

• franchises and barriers to entry.

• close substitutes and no barriers to entry.

• barriers to entry and no close substitutes.

An example of a monopoly is

• the only veterinarian in an isolated farm community.

• the stock market.

• PPUM

• a big city restaurant.

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

• The firm is a price taker

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

• The market price exceeds marginal revenue.

• Demand is perfectly elastic.

Which of the following is TRUE of a monopoly?

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

• Its marginal cost curve is always downward sloping.

• None of above

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

A monopoly can price discriminate between two groups of consumers if each group has

• a large consumer surplus.

• a different willingness to pay.

• the same willingness to pay.

• the ability to resell the good to the other group.

Which of the following is most likely an example of a monopoly?

• A Starbucks across from Dunkin Donuts

• 3 fast food restaurants all on the same street

• A gas station in the country by itself

• A Kroger 4 miles away from a Walmart

Monopoly occurs when there is a single _____ in the market of a certain good.

• Household

• Producer

• Industry

• Consumer

• Buyer

Which of the following are true in monopoly?

• The monopolist protect their position through barriers to entry

• The demand curve for the firm and the market are the same

• The monopolist can set price and output

A monopoly requires

• Products that are high priced

• Several close substitutes for the product

• That the product cannot be produced by small firms

• A unique product with no close substitutes

When one business controls a whole sector of an economy:

• oligopoly

• monopoly

• cartel

• perfect competition