Monopoly

Which of the following statements is consistent with the views of Joseph Schumpeter? 73) ______ A) A lack of competition discourages firms from developing new technologies. B) An economy benefits from firms having market power because these firms are more likely to be able to commit funds for research and development. C) Research and development by competitive firms is responsible for most technological changes. D) Enforcement of antitrust laws is necessary to promote competition among firms.

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Refer to Figure 15-3. What is the amount of the monopoly's profit? A) $2,700 B) $4,200 C) $10,400 D) $12,600

A) $2,700

Refer to Table 15-2. What is the amount of Shakti's profit? A) $68 B) $72 C) $124 D) $192

A) $68

Refer to Table 15-2. What is Shakti's profit-maximizing output? A) 4 units B) 5 units C) 6 units D) 7 units

A) 4 units

Refer to Table 15-2. What is the economically efficient output level? A) 5 units B) 6 units C) 7 units D) 8 units

A) 5 units

Refer to Figure 15-3. What is the profit-maximizing/loss-minimizing output level? A) 600 units B) 800 units C) 940 units D) 1,160 units

A) 600 units

Refer to Figure 15-2. Suppose the monopolist represented in the diagram above produces positive output. What is the profit-maximizing/loss-minimizing output level? A) 630 units B) 800 units C) 850 units D) 880 units

A) 630 units

What is a network externality? A) It refers to a situation in which a product's usefulness increases with the number of people using it. B) It refers to having a network of suppliers and buyers for a good or service. C) It refers to a product that requires connection to a network for it to be useful. D) It refers to lobbying to form a public enterprise.

A) It refers to a situation in which a product's usefulness increases with the number of people using it.

Peet's Coffee and Teas produces some flavorful varieties of Peet's brand coffee. Is Peet's a monopoly? A) No, although Peet's coffee is a unique product, there are many different brands of coffee that are very close substitutes. B) No, Peet's is not a monopoly because there are many branches of Peet's. C) Yes, Peet's is the only supplier of Peet's coffee in a market where there are high barriers to entry. D) Yes, there are no substitutes to Peet's coffee.

A) No, although Peet's coffee is a unique product, there are many different brands of coffee that are very close substitutes.

The first important federal law passed to regulate monopolies in the United States was the A) Sherman Act. B) Cellar-Kefauver Act. C) Clayton Act. D) Federal Trade Commission Act.

A) Sherman Act

A monopolist faces A) a downward-sloping demand curve. B) a horizontal demand curve. C) a perfectly elastic demand curve. D) a perfectly inelastic demand curve.

A) a downward-sloping demand curve.

Relative to a perfectly competitive market, a monopoly results in A) a gain in producer surplus less than the loss in consumer surplus. B) a gain in producer surplus equal to the gain in consumer surplus. C) a gain in producer surplus equal to the loss in consumer surplus. D) greater economic efficiency.

A) a gain in producer surplus less than the loss in consumer surplus.

The Clayton Act prohibited A) any merger if its effect was to substantially lessen competition or create a monopoly. B) all vertical mergers. C) all horizontal mergers. D) all conglomerate mergers.

A) any merger if its effect was to substantially lessen competition or create a monopoly.

Refer to Figure 15-9. Why won't regulators require that Erickson Power produce the economically efficient output level? A) because Erickson Power will earn zero profit B) because there is insufficient demand at that output level C) because at the economically efficient output level, the marginal cost of producing the last unit sold exceeds the consumers' marginal value for that last unit D) because Erickson Power will sustain persistent losses and will not continue in business in the long run

A) because Erickson Power will earn zero profit

A merger between two competitors may be approved by the Department of Justice and the FTC if the two companies can substantiate ________ as a result of the merger. A) increases in economic efficiency B) increases in revenue for the merged company C) decreases in marginal revenue for the merged company D) an increase in the HHI to over 1,800

A) increases in economic efficiency

In a natural monopoly, throughout the range of market demand A) marginal cost is below average total cost and pulls average total cost downward. B) there are diseconomies of scale. C) marginal cost is above average total cost and pulls average total cost upward. D) average total cost is above marginal cost and pulls marginal cost upward.

A) marginal cost is below average total cost and pulls average total cost downward.

If a theatre company expects $250,000 in ticket revenue from five performances and $288,000 in ticket revenue if it adds a sixth performance, the A) marginal revenue of the sixth performance is $38,000. B) company will be making a loss on the sixth performance because its ticket sales will be less than the average received from the previous five. C) cost of staging the sixth performance is probably higher than the cost of staging the previous five. D) marginal revenue of the sixth performance is $48,000

A) marginal revenue of the sixth performance is $38,000.

The size of a deadweight loss in a market is reduced by A) market price being close to marginal cost. B) government legislating a price floor. C) government legislating a ceiling price. D) creative destruction.

A) market price being close to marginal cost.

Long-run economic profits would most likely exist in which market structure? A) monopoly and oligopoly B) monopoly and monopolistic competition C) monopoly only D) monopoly, monopolistic competition and oligopoly

A) monopoly and oligopoly

Firms do not have market power in which of the following market structures? A) perfect competition only B) monopoly C) oligopoly D) perfect competition and monopolistic competition

A) perfect competition only

If a firm's average total cost is less than price where MR=MC, A) the firm should continue to produce the output it is producing. B) the firm should raise its price. C) the firm should cut back on its output to lower its cost. D) the firm should shut down.

A) the firm should continue to produce the output it is producing.

The demand curve for the monopoly's product is A) the market demand for the product. B) more inelastic than the market demand for the product. C) more elastic than the market demand for the product. D) undefined.

A) the market demand for the product.v

Economic efficiency in a free market occurs when A) the sum of consumer surplus and producer surplus is maximized. B) price is as low as possible. C) consumer surplus is maximized. D) producer surplus is maximized.

A) the sum of consumer surplus and producer surplus is maximized.

Refer to Figure 15-6. What is the area that represents consumer surplus under a monopoly? A) the triangle P0P1F B) the triangle P0P2E C) the rectangle P1P3HF D) the trapezium P1P2EF

A) the triangle P0P1F

Refer to Figure 15-3. What is the amount of the monopoly's total cost of production? A) $21,600 B) $17,700 C) $9,340 D) $7,800

B) $17,700

Refer to Figure 15-3. What is the amount of the monopoly's total revenue? A) $21,600 B) $20,400 C) $19,740 D) $7,800

B) $20,400

Refer to Table 15-1. What is the amount of the firm's profit? A) $335 B) $350 C) $880 D) $910

B) $350

Which one of the following about a monopoly is false? A) A monopoly status could be temporary. B) A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly. C) A monopoly could make profits in the long run. D) A monopoly could break even in the long run.

B) A monopoly must have some kind of government privilege or government imposed barrier to maintain its monopoly.

The standards used by the Department of Justice and the FTC to evaluate a potential merger are based on market concentration as determined by the A) Anti-Collusion Task Force. B) Clayton Antitrust Act. C) Herfindahl-Hirschman Index. D) Robinson-Patman Act.

B) Clayton Antitrust Act.

Which of the following is a characteristic shared by a perfectly competitive firm and a monopoly? A) Each maximizes profits by producing a quantity for which marginal revenue equals marginal cost. B) Each maximizes profits by producing a quantity for which price equals marginal cost. C) Each sets a price for its product that will maximize its revenue. D) Each must lower its price to sell more output.

B) Each maximizes profits by producing a quantity for which price equals marginal cost.

Refer to Figure 15-6. The deadweight loss due to a monopoly is represented by the area A) FQ1Q2E. B) FHE. C) GEH. D) FGE.

B) FHE

An example of a monopoly based on control of a key resource is A) the U.S. Food and Drug Administration. B) Major League Baseball. C) the Paul Ecke Ranch monopoly on poinsettias. D) Microsoft's Windows operating system.

B) Major League Baseball.

Which of the following statements applies to a monopolist but not to a perfectly competitive firm at their profit maximizing outputs? A) Average revenue equals average cost. B) Marginal revenue is less than price. C) Price equals marginal cost. D) Marginal revenue equals marginal cost

B) Marginal revenue is less than price.

Refer to Table 15-1. What is the firm's profit-maximizing output and what is the price charged to sell this output? A) P = $80; Q = 11 B) P = $70; Q = 13 C) P = $85; Q = 10 D) P = $65; Q = 14

B) P = $70; Q = 13

Refer to Figure 15-9. If the government regulates Erickson Power Company so that the firm can earn a normal profit, the price would be set at ________ and the output level is ________. A) P1, Q4 B) P2, Q3 C) P3, Q2 D) P2, Q2

B) P2, Q3

Refer to Figure 15-9. The firm would maximize profit by producing A) Q1 units. B) Q2 units. C) Q3 units. D) Q4 units.

B) Q2 units.

Refer to Figure 15-1. To maximize profit, the firm will produce A) Q1. B) Q2. C) Q3. D) Q4.

B) Q2.

Refer to Figure 15-9. What is the economically efficient output level and what is the price at that level? A) Q2, P2 B) Q4, P1 C) Q3, P2 D) Q2, P3

B) Q4, P1

Which of following is the best example of a monopoly if we use a broader definition of monopoly? A) Zippie Rentals, a sports car rental service in the downtown Boston area B) Santos Tacos, the only taqueria in the small town of Santosville C) Spuds McKenzie, a wealthy potato farmer in Idaho D) Cheap Gas, one of two gasoline stations in a large rural community

B) Santos Tacos, the only taqueria in the small town of Santosville

For a natural monopoly to exist, A) a firm must have a government-imposed barrier. B) a firm's long-run average cost curve must exhibit economies of scale throughout the relevant range of market demand. C) a firm's long-run average cost curve must exhibit diseconomies of scale beyond the economically efficient output level. D) a firm must continually buy up its rivals.

B) a firm's long-run average cost curve must exhibit economies of scale throughout the relevant range of market demand.

Why does a monopoly cause a deadweight loss? A) because it increases producer surplus at the expense of consumer surplus B) because it does not produce some output for which marginal benefit exceeds marginal cost C) because it appropriates a portion of consumer surplus for itself D) because it does not produce some output for which demand exceeds supply

B) because it does not produce some output for which marginal benefit exceeds marginal cost

The Sherman Act prohibited A) setting price above marginal cost. B) collusive price agreements among rival sellers. C) selling below average total cost. D) marginal cost pricing.

B) collusive price agreements among rival sellers

Governments grant patents to A) encourage firms to reveal secret production techniques. B) compensate firms for research and development costs. C) encourage low prices. D) encourage competition.

B) compensate firms for research and development costs.

In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price A) equal to marginal cost where it intersects the demand curve. B) equal to average total cost where it intersects the demand curve. C) corresponding to the demand curve where marginal revenue equals zero. D) equal to average variable cost where it intersects the demand curve.

B) equal to average total cost where it intersects the demand curve.

A merger between the Ford Motor Company and General Motors would be an example of a A) conglomerate merger. B) horizontal merger. C) vertical merger. D) trust.

B) horizontal merger

A market economy benefits from market power A) under no circumstances. B) if firms with market power do research and development with the profits earned. C) if market power gets so bad the government creates public enterprises. D) if the majority of the population are entrepreneurs.

B) if firms with market power do research and development with the profits earned.

Compared to perfect competition, the consumer surplus in a monopoly A) is higher because price is higher and output is the same. B) is lower because price is higher and output is lower. C) is eliminated. D) is unchanged because price and output are the same.

B) is lower because price is higher and output is lower.

If a natural monopoly regulatory commission sets a price where marginal cost is equal to demand A) the firm would break even. B) the firm would incur a loss. C) economic efficiency would not be achieved. D) the firm would earn monopoly profits.

B) the firm would incur a loss.

A possible advantage of a horizontal merger for the economy is that A) the merging firms could avoid losses. B) the merged firm might reap economies of scale which could translate into lower prices. C) the government stands to collect more corporate income tax revenue. D) the degree of competition in the industry will be intensified

B) the merged firm might reap economies of scale which could translate into lower prices.

Because a monopoly's demand curve is the same as the market demand curve for its product, A) the monopoly's marginal revenue equals its price. B) the monopoly must lower its price to sell more of its product. C) the monopoly's average total cost always falls as it increases its output. D) the monopoly is a price taker

B) the monopoly must lower its price to sell more of its product.

If a monopolist's marginal revenue is $25 a unit and its marginal cost is $25, then A) to maximize profit the firm should decrease output. B) to maximize profit the firm should continue to produce the output it is producing. C) to maximize profit the firm should increase output. D) Not enough information is given to say what the firm should do to maximize profit.

B) to maximize profit the firm should continue to produce the output it is producing.

Refer to Table 15-1. What is the marginal revenue from the sale of the 12th unit? A) $75 B) $50 C) $20 D) -$5

C) $20

Refer to Figure 15-5. At the profit-maximizing quantity, what is the difference between the monopoly's price and the marginal cost of production? A) $8 B) $11.50 C) $21 D) There is no difference.

C) $21

Refer to Figure 15-2. Suppose the monopolist represented in the diagram above produces positive output. What is the price charged at the profit-maximizing/loss-minimizing output level? A) $38 B) $54 C) $68 D) $75

C) $68

Refer to Figure 15-5. What is the difference between the monopoly output and the perfectly competitive output? A) 140 units B) 240 units C) 340 units D) 560 units

C) 340 units

Refer to Figure 15-5. What is the economically efficient output level? A) 600 units B) 800 units C) 940 units D) 1160 units

C) 940 units

Refer to Figure 15-1. The firm's profit-maximizing price is A) P1. B) P2. C) P3. D) P4.

C) P3

Refer to Figure 15-9. The profit-maximizing price is A) P1. B) P2. C) P3. D) P4.

C) P3.

In Walnut Creek, California, there are three very popular supermarkets: Safeway, Whole Foods and Lunardi's. While Safeway remains open twenty-four hours a day, Whole Foods and Lunardi's close at 9 pm. Which of the following statements is true? A) Safeway is a monopoly all day because it produces a service that has no close substitutes. B) Safeway probably has a higher markup to compensate for its higher cost of production. C) Safeway has a monopoly at midnight but not during the day. D) Safeway can ignore the pricing decisions of the other two supermarkets.

C) Safeway has a monopoly at midnight but not during the day.

Refer to Figure 15-7. What is the size of the deadweight loss prior to Verizon entering the market and what happens to this deadweight loss after Verizon does enter the market? A) The total deadweight loss is the area D+F; D is converted to consumer surplus and F to producer surplus. B) The deadweight loss of area D is converted to producer surplus. C) The deadweight loss of area D is converted to consumer surplus. D) The deadweight loss of area C+D is converted to consumer surplus

C) The deadweight loss of area D is converted to consumer surplus.

Refer to Figure 15-5. What is the difference between the monopoly's price and perfectly competitive industry's price? A) The monopoly's price is higher by $21. B) The monopoly's price is higher by $3.50. C) The monopoly's price is higher by $13. D) The monopoly's price is higher by $9.50.

C) The monopoly's price is higher by $13.

To enter a local cable television market, a firm needs a license from the city government. This is an example of A) a natural monopoly. B) the government maintaining consistent standards in the broadcast industry. C) a government-imposed barrier. D) occupational licensing.

C) a government imposed barrier

Refer to Figure 15-6. Compared to a perfectly competitive market, consumer surplus is lower in a monopoly by an amount equal to the A) area FGE. B) area FHE. C) area P1P2EF. D) area P1P2GF.

C) area P1P2EF.

Refer to Figure 15-9. Erickson Power is a natural monopoly because A) of its continually declining marginal revenue curve as output rises. B) it is a power company and all power companies are natural monopolies. C) average total cost is still declining when it intersects demand. D) its marginal cost lies entirely below its long-run average cost

C) average total cost is still declining when it intersects demand.

Refer to Figure 15-1. If the firm's average total cost curve is ATC2, the firm will A) face competition. B) make a profit. C) break even. D) suffer a loss.

C) break even

A local electricity-generating company has a monopoly that is protected by an entry barrier that takes the form of A) network externalities. B) control of a key raw material. C) economies of scale. D) perfectly inelastic demand curve.

C) economies of scale.

A patent or copyright is a barrier to entry based on A) large economies of scale as output increases. B) ownership of a key necessary raw material. C) government action to protect a producer. D) widespread network externalities.

C) government action to protect a producer.

The Aluminum Company of America (Alcoa) had a monopoly until the 1940s because 19) ______ A) it had a patent on the manufacture of aluminum. B) it was a public enterprise. C) it had control of almost all the available supply of bauxite. D) the company had a secret technique for making aluminum from bauxite.

C) it had control of almost all the available supply of bauxite.

Refer to Figure 15-2. Suppose the monopolist represented in the diagram above produces positive output. What is the profit/loss per unit? A) loss of $21 per unit B) profit of $14 per unit C) loss of $7 per unit D) profit of $30 per unit

C) loss of $7 per unit

Refer to Figure 15-1. If the firm's average total cost curve is ATC1, the firm will A) face competition. B) suffer a loss. C) make a profit. D) break even.

C) make a profit

Refer to Figure 15-1. If the firm's average total cost curve is ATC3, the firm will A) make a profit. B) face competition. C) suffer a loss. D) break even.

C) suffer a loss

A Herfindahl-Hirschman Index is calculated by A) summing the advertising expenditures of the firms that want to merge by total industry advertising expenditures. B) dividing the number of firms wanting to merge by the total number in the industry. C) summing the squares of the market shares of each firm in the industry. D) summing the amount of sales by the four largest firms and dividing by total industry sales.

C) summing the squares of the market shares of each firm in the industry.

If we use a narrow definition of monopoly, then a monopoly is defined as a firm A) that has the largest market share in an industry. B) that has been granted special production rights by the government. C) that can ignore the actions of all other firms because it produces a product for which there are no close substitutes. D) that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products.

C) that can ignore the actions of all other firms because it produces a product for which there are no close substitutes.

Market power refers to A) the ability of a firm to sell at a lower price than rival sellers. B) the ability of a firm to advertise its product and succeed in selling more output. C) the ability of a firm to charge a price higher than the marginal cost of production. D) the ability of consumers to dictate what products should be produced.

C) the ability of a firm to charge a price higher than the marginal cost of production.

One reason patent protection is vitally important to pharmaceutical firms is A) that taxes on profits from drugs are very high; profits from patent protection enable firms to pay these taxes. B) successful new drugs are not profitable. If firms are not granted patents many would go out of business and health care would be severely diminished. C) the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms to recover costs incurred during this process. D) the high salaries pharmaceutical firms pay to scientists and doctors make their labor costs higher than for any other business. Profits from patents are needed to pay these labor costs.

C) the approval process for new drugs through the Food and Drug Administration can take more than 10 years and is very costly. Patents enable firms to recover costs incurred during this process.

A monopoly is characterized by all of the following except A) there are no close substitutes to the firm's product. B) entry barriers are high. C) there are only a few sellers each selling a unique product. D) the firm has market power.

C) there are only a few sellers each selling a unique product.

A merger between U.S. Steel and General Motors would be an example of a A) conglomerate merger. B) conspiracy in restraint of trade. C) vertical merger. D) horizontal merger.

C) vertical merger

Refer to Table 15-2. What is the amount of the deadweight loss generated by Shakti when it produces the monopoly output? A) $124 B) $42 C) $36 D) $12

D) $12

Refer to Figure 15-3. What is the price charged for the profit-maximizing output level? A) $13 B) $21 C) $27 D) $34

D) $34

Consider an industry that is made up of nine firms each with a market share (percent of sales) as follows: a. Firm A: 30% b. Firm B: 20% c. Firms C, D and E: 10% each d. Firms F, G, H and J: 5% each What is the value of the Herfindahl-Hirschman Index and how is the industry categorized? A) 1425; moderately concentrated B) 1600; moderately concentrated C) 2600; highly concentrated D) 1700; moderately concentrated

D) 1700; moderately concentrated

Refer to Figure 15-2. What happens to the monopolist represented in the diagram in the long run? A) It will be forced out of business by more efficient producers. B) The government will subsidize the monopoly to enable it to break even. C) It will raise its price at least until it breaks even. D) If the cost and demand curves remain the same, it will exit the market.

D) If the cost and demand curves remain the same, it will exit the market.

Refer to Figure 15-3. What is likely to happen to this monopoly in the long run? A) New firms will enter the market to eliminate its profits. B) As long as there are entry barriers, this firm will continue to enjoy economic profits. C) It will be regulated by the government because of its excess profits. D) It will expand its output to take advantage of economies of scale so as to further increase its profit.

D) It will expand its output to take advantage of economies of scale so as to further increase its profit.

If a monopolist's price is $50 per unit and its marginal cost is $25, then A) to maximize profit the firm should increase output. B) to maximize profit the firm should continue to produce the output it is producing. C) to maximize profit the firm should decrease output. D) Not enough information is given to say what the firm should do to maximize profit.

D) Not enough information is given to say what the firm should do to maximize profit.

Refer to Figure 15-7. Suppose the local government imposes a $2.50 per month tax on cable companies. What happens to the price charged by the cable company following the imposition of this tax? A) The price rises from PM but it increases by an amount greater than $2.50 to reflect the monopoly's markup. B) The price remains at PM. C) The price rises from PM to (PM + $2.50). D) The price rises from PM but it increases by an amount less than $2.50.

D) The price rises from PM but it increases by an amount less than $2.50.

To maintain a monopoly, a firm must have A) marginal revenue equal to demand. B) few competitors. C) a perfectly inelastic demand. D) an insurmountable barrier to entry.

D) an insurmountable barrier to entry.

The Federal Trade Commission (FTC) Act A) closed the loopholes in the Sherman and Clayton Acts. B) prohibited charging buyers different prices if the result would reduce competition. C) gave the FTC full power to regulate mergers. D) divided authority to police mergers between the FTC and the Department of Justice.

D) divided authority to police mergers between the FTC and the Department of Justice.

Economic efficiency requires that a natural monopoly's price be A) equal to average total cost where it intersects the demand curve. B) equal to the lowest price the firm can charge and still make a normal profit. C) equal to average variable cost where it intersects the demand curve. D) equal to marginal cost where it intersects the demand curve.

D) equal to marginal cost where it intersects the demand curve.

A profit maximizing monopoly's price is A) not consistently related to price that would prevail if the market was perfectly competitive. B) less than the price that would prevail if the industry was perfectly competitive. C) the same as the price that would prevail if the industry was perfectly competitive. D) greater than the price that would prevail if the industry was perfectly competitive.

D) greater than the price that would prevail if the industry was perfectly competitive.

The government estimated that by allowing the merger between AT&T and T-Mobile to go through, the Herfindahl Hirschman Index for the national market would increase from about 2,400 to about 3,100. According to the merger standards of the Department of Justice and the FTC, these index numbers indicate that the market is ________ concentrated, and the merger ________ be challenged. A) moderately; may B) highly; may C) moderately; will D) highly; will

D) highly; will

A firm that has the ability to control to some degree the price of the product it sells A) is also able to dictate the quantity purchased. B) faces a perfectly inelastic demand curve. C) faces a demand curve that is inelastic throughout the range of market demand. D) is a price maker.

D) is a price maker.

Natural monopolies in the United States are generally regulated by A) the Federal Trade Commission. B) the Department of Justice. C) the Department of Commerce. D) local or state regulatory commissions

D) local or state regulatory commissions

Governments grant patents to encourage A) competition. B) low prices. C) firms to form public enterprises. D) research and development on new products.

D) research and development on new products.

Refer to Figure 15-7. Following the entry of Verizon, the subscription price falls from PM to PC. What is the increase in consumer surplus as a result of this change? A) the area A + B + C B) the area D + F C) the area B + C D) the area B + C + D

D) the area B + C + D

Refer to Figure 15-6. What is the area that represents producer surplus under a monopoly? A) the triangle 0P3H B) the rectangle P1P3HF C) the triangle 0P2E D) the trapezium 0P1FH

D) the trapezium 0P1FH

A virtuous cycle occurs A) when lobbyists petition members of Congress to grant a public franchise; the lobbyist then raise money for those Congress members who granted the franchise. B) when a firm's sales volume reaches a level where the firm can take advantage of economies of scale; thereby reducing the price of the product to further boost its sales. C) when monopoly profits are used to create new products for additional monopoly profits. D) when a firm can attract enough buyers initially to increase a product's usefulness to attract even more buyers.

D) when a firm can attract enough buyers initially to increase a product's usefulness to attract even more buyers.

A monopolist's profit maximizing price and output correspond to the point on a graph A) where total costs are the smallest relative to price. B) where price is as high as possible. C) where average total cost is minimized. D) where marginal revenue equals marginal cost and charging the price on the market demand curve for that output.

D) where marginal revenue equals marginal cost and charging the price on the market demand curve for that output.

When a proposed merger between two companies is reviewed by the government, the relevant market is defined by A) how elastic the demand is for each firm's product. B) counting the number of firms that produce the same product. C) how much advertising is done in the industry. D) whether or not there are close substitutes for the products of the two firms.

D) whether or not there are close substitutes for the products of the two firms.

a monopoly is a seller of a product A) with many substitutes. B) with a perfectly inelastic demand. C) without a close substitute. D) without a well-defined demand curve.

D) without a close substitute