WorksheetsQUIZ LAB 7
Total questions: 10
Worksheet time: 10mins
Which of the following is correct regarding the differences and similiraties in monopoly and monopolistic competition market?
Faces a downward-sloping demand curve while the monopolistic competitor faces an elastic demand curve.
Charges a price above marginal cost while the monopolistic competitor charges a price equal to marginal cost.
Charges a price equal to marginal cost while the monopolistic competitor charges a price above marginal cost.
Makes economic profits in the long run while the monopolistic competitor makes zero economic profits in the long run.
Makes zero economic profits in the long run while the monopolistic competitor makes economic profits in the long run.
Which of the following is most likely to spend a large percentage of their revenue on advertising?
The producer of a highly differentiated consumer product.
The manufacturer of an undifferentiated commodity.
A perfect competitor.
The manufacturer of an industrial product.
The producer of a low quality product that costs the same to produce as a similar high quality product.
Natural monopoly is a firm whose…
Average total cost continually declines at least to the quantity that could supply the entire market.
Average total cost continually increases at least to the quantity that could supply the entire market.
Marginal cost continually declines at least to the quantity that could supply the entire market.
Marginal cost continually increases at least to the quantity that could supply the entire market.
Exist as a result of antitrust laws operates at decreasing return to scale.
Quantity in monopoly with perfect price discrimination equals…
Without perfect price discrimination monopoly.
Perfect competition market.
Below than without perfect price discrimination monopoly.
Above than perfect competition market.
Above than without perfect price discrimination monopoly but below than perfect competition market.
The purpose of antitrust (also known as competition) laws is to
Increase competition in an industry by preventing mergers and breaking up large firms.
Regulate the prices charged by a monopoly.
Increase merger activity to help generate synergies that reduce costs and raise efficiency.
Decrease merger activity to help generate synergies that reduce costs and raise efficiency.
Decrease competition in an industry by preventing mergers and breaking up large firms.
Perfect price discrimination charges price for each consumer equals…
Willingness to Pay
Elasticities
Marginal cost
Average revenue
All of the answer is correct
A monopoly is able to continue to generate economic profits in the long run because
There is some barrier to entry to that market.
Potential competitors sometimes don't notice the profits.
The monopolist is financially powerful.
Antitrust laws eliminate competitors for a specified number of years.
Of all of the things described in these answers
If regulators break up a natural monopoly into many smaller firms, the cost of production
Will rise
Will fall
Will remain the same
Could either rise or fall depending on the elasticity of the monopolist's demand curve
Could either rise or fall depending on the elasticity of the monopolist's cost function
Public ownership of natural monopolies
Tends to be inefficient.
Usually lowers the cost of production dramatically.
Tends to be efficient.
Creates synergies between the newly acquired firm and
Other government-owned companies.
usually higher the cost of production dramatically
In monopolistic market competition, since price is above marginal cost, some units are not produced that buyers value in…
Since price is above marginal cost, surplus is redistributed from buyers to sellers.
Since price is below marginal cost, surplus is redistributed from sellers to buyers.
Monopolistically competitive firms earn economic profits in the long run.
Monopolistically competitive firms produce beyond their efficient scale.
Excess of the cost of production and this causes a deadweight loss.
