Industrial Organizations quiz

Which of these causes a NATURAL monopoly to arise?

• The company has an invention that has been patented

• The company has received a goverment consession to mine lithium in a country

• The company faces high fixed costs but low marginal costs

• None of the answers is right

In which market structure is the price of a product is HIGHEST?

• Monopoly

• Oligopoly without collusion

• Perfect competition

• Duopoly without collusion

Which public policy action provides the lowest prices and highest welfare?

• Breakup of a private monopoly into two companies

• Price regulation of a private monopoly at average total cost

• Nationalization of the private monopoly

• Price regulation of a private monopoly at marginal cost

Which market situation can be modeled as a prisoner's dilemma?

• Overproduction of oil in an OPEC country

• "Ad war" between presidential candidates

• Escalation of war

• All the answers are right

What was the result of the US vs. Microsoft antitrust case?

• Microsoft was broken up into two companies

• Microsoft had to open up Windows for external software developers

• Microsoft had to pay a large fine

• Microsoft's management was arrested