Intro to Monopolies

Which of the following is NOT a characteristic of monopoly?

• One seller

• Unique Good

• Free entry and exit

• Price setting behavior

Which of the following is an example of a legally created monopoly?

• Diamonds

• US Postal Service

• Internet providers

• Stock markets

A monopolist is profit maximizing when they choose quantity when:

• MC = MR

• MC=ATC

• P=MC

• MR=0

When a monopolist is profit maximizing, their price is equal to marginal revenue.

• True

• False

Based on this graph, which of the following price and quantity combinations represents the monopolist's profit maximizing choice?

• P1, q1

• P5, q1

• P2, q2

• P3, q4

• None of these

Which of the following is NOT a consequence of monopoly power?

• Too much produced

• Deadweight loss

• Lost consumer surplus

• Inefficient pricing