Monopoly

Which is true about monopolies?

• Monopolies always earn an economic profit.

• The market demand and the firm's demand are the same.

• Monopolies have perfectly inelastic demand.

• The monopolist's supply curve is the same as the market demand curve.

A monopolist is

• a price taker

• able to ignore the demand for its product when setting price

• able to set the price for its product

• able to earn only a normal profit in the long run

Price discrimination is...

• Selling the exact same product at two different prices in the same market

• Selling the exact same product at two different prices in different markets.

• Selling the two similar products at two different prices in different markets.

• Illegal

The maximum profit for a single-price monopolist is found when the firm produces the level of output so that

• marginal revenue equals marginal cost

• price equals marginal cost

• it can charge the highest possible price

• it can charge the lowest possible price

Economic profits for this monopoly are represented by area:

• 0CGE
• 0AJE
• AJHB
• BAJN

Laws against monopolies are called,

• Dead weights

• Illegal

• Anti-Trust Laws

• Ownership Laws

Which of the following is not a barrier to entry in a monopolized market?

• The presence of many buyers and sellers in the market

• The government gives a single firm the exclusive right to produce some good.

• The costs of production make a single producer more efficient than a large number of producers.

• A key resource is owned by a single firm.

One of the requirements for a monopoly is that

• products are high priced

• there are several close substitutes for the product

• there is a unique product with no close substitutes

• the product cannot be produced by small firms

A barrier to entry is

• an economic term for economies of scale

• illegal in most markets

• anything that prevents new firms from entering the market

• a factor that increases competition

If a monopolist wants to sell a larger quantity, it must

• set a higher price

• maintain the current price

• set a lower price

• implement new technology