Unit 6 - Monopolies\

What is a monopoly?

• A market with multiple firms competing without any barriers.

• A market with a single firm that produces a good or service with no close substitutes and is protected by a barrier that prevents other firms from entering that market.

• A market where all firms produce identical products.

• A market where consumers have numerous close substitutes for the products offered.

Which of the following is NOT a reason for the rise of a monopoly?

• No close substitutes

• Barriers to entry

• High consumer demand

• Technological change

What can create substitutes and weaken a monopoly?

• A decrease in consumer demand

• An increase in the price of the product

• Technological change

• Government regulations

Which of the following is an example of a barrier to entry?

• A decrease in market demand

• A government subsidy for all firms

• Natural barriers

• An increase in the number of suppliers

What are the three types of barriers to entry mentioned in the text?

• Economic, Social, and Technological

• Natural, Ownership, and Legal

• Governmental, Environmental, and Financial

• Cultural, Educational, and Political

What is the cost per kilowatt-hour if one firm supplies the entire market of 4 million kilowatt-hours in a natural monopoly scenario?

• 5 cents

• 10 cents

• 15 cents

• 20 cents

How much would it cost each firm to produce a total of 4 million kilowatt-hours if two firms shared the market equally?

• 5 cents per kilowatt-hour

• 10 cents per kilowatt-hour

• 15 cents per kilowatt-hour

• 20 cents per kilowatt-hour

What does the LRAC curve represent in the context of a natural monopoly?

• Market demand curve

• Long-run average cost curve

• Quantity of kilowatt-hours produced

• Price per kilowatt-hour

Which of the following is an example of a barrier to entry in a monopoly market?

• Economies of scale

• Concentration of ownership

• Cost per kilowatt-hour

• Quantity of kilowatt-hours produced

What is a legal monopoly?

• A market where competition and entry are unrestricted.

• A market in which competition and entry are restricted by the granting of a public franchise, government licence, patent, or copyright.

• A market where only one supplier is allowed to exist without any legal restrictions.

• A market where competition is based solely on product quality.