Market Structures and Monopoly Review

A monopoly is characterized by...

• a large number of firms, all of which have identical products

• a large number of firms, all of which offer similar but not identical products.

• market domination by only a few firms.

• the only firm in that industry and produces a specific product with no close substitutes.

Which of the following is characterized by high barriers to entry?

• Monopoly

• Pure Competition

• Oligopoly

• Free Market

Which of the following is true of monopolies ?

• Has no rivals

• Creates high barriers to enter the market

• Sets Price

• Allows Consumer input

Why is this scenario an example of a monopoly? John and Mary Doe run the only shoe repair shop in town.

• There's alternatives in the market.

• There's no alternatives in the market

Which best describes the goal of a monopoly?

• Maximize profits

• Address Consumer Concerns

• Lower Barriers to Entry

• Improve products

Monopolies don't have an incentive to increase quality or innovate because...

• To increase profit

• They need to in order to stay competitive

• False, monopolies will continue to increase cost to make consumers happy

• They control the market

Advantages of a monopoly...

• Monopolies increase prices and decrease quantity over competitive markets.

• Deadweight losses indicate that monopolies are inefficient.

• Economies of scale can exist so that each unit is produced more efficiently (i.e., at a

  lower per-unit cost) in larger firms.

For a monopolist,

• its marginal revenue is less than price.

• existing economic profits can be sustained over time.

• its demand curve is downward sloping.

• all of the above are true.

This industry should be described as which market structure?

• perfect competition

• oligopoly

• monopoly

• monopolistic competition

This industry should be described as which market structure?

• perfect competition

• oligopoly

• monopoly

• monopolistic competition