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Micro: Monopoly (Regulations)

Authored by Alia A

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Micro: Monopoly (Regulations)
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49 questions

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1.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Why do people consider the monopolist to be the bad guy?

It's because the monopolist charges more money and provides less to the market than a competitive market would.
The monopolist produces a higher quality product than a competitive market.
The monopolist charges more money and provides less to the market than a competitive market would.
Consumers view a monopoly as good.

2.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Who views a monopoly as bad?

Consumers.
The government.
Competitors.
The monopolist.

3.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

What is a natural monopoly?

A monopoly that occurs when startup costs are so large that the average total cost is always declining.
A monopoly that controls the entire market share.
A monopoly formed through illegal means.
A monopoly that is supported by the government.

4.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

Where is maximum profit for a profit-maximizing natural monopolist?

At the level of output where marginal revenue equals marginal cost (MR=MC).
At the level of output where marginal cost is the same as average total cost.
At the level of output where average total cost is at its minimum.
At the level of output where price is the highest.

5.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

What happens if a natural monopolist is subjected to marginal cost pricing regulation?

The monopolist loses the difference between its per unit cost and the price it's allowed to charge on every unit.
The monopolist shuts down its operations.
The monopolist increases output to match demand.
The monopolist gains profits due to lower prices.

6.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

What is an option the government could use to persuade a natural monopolist to stay in the industry?

Allow the monopolist to price discriminate.
Subsidize the monopolist's losses.
Force the monopolist to shut down operations.
Impose higher taxes on the monopolist.

7.

MULTIPLE CHOICE QUESTION

20 sec • 1 pt

How does perfect price discrimination work?

It involves charging each customer their maximum willingness to pay.
It involves charging a fixed price for all customers.
It involves setting a price ceiling for all customers.
It involves charging different prices based on production costs.

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