Pure Monopoly - Smartbook

Laws designed to prevent firms from engaging in behaviors that would lessen competition in a market are called:

antitrust laws.

A market structure characterized by a single seller is a(n) _.

Monopoly

Compared to an unregulated natural monopoly, what is true about the price charged and quantity produced when a natural monopoly is regulated?

Price is lower and Quantity is higher Reason: With government regulation of a natural monopoly, the price falls and quantity increases. This is true for both normal profit price and competitive price regulation.

Which of the following measures the percentage of sales by the four largest firms in a particular industry?

The four-firm concentration ratio (CR4)

Referring to the graph, assume the government wants to regulate the market for cable television, a natural monopoly. Match the price to the unregulated monopoly price, the regulated normal profit price, and the regulated competitive price.

Unregulated monopoly price - $60 Regulated Normal Profit price - $40 Regulated competitive price - $30

Laws designed to prevent firms from engaging in behaviors that would lessen competition in a market are called _ laws.

antitrust or anti-trust

Price _ is the practice of selling the same good or service to different consumers at different prices.

discrimination

The practice of selling the same good or service to different consumers at different prices is called price _.

discrimination

Total revenue minus the implicit costs and explicit costs of production is _ profit.

economic

A concentration ratio that measures the percentage of sales by the four largest firms in a particular industry is called the:

four-firm concentration ratio.

Total revenue minus the _costs and _ costs of production is economic profit.

implicit; economic or explicit

A pure _ is the only seller in a market.

monopoly

In a(n) _, there are a few large producers.

oligopoly

In a(n) _ market, there are relatively few firms and the product is either standardized or differentiated.

oligopoly or oligopolistic

The practice of selling the same good or service to different consumers at different prices is called _ discrimination.

price

The practice of selling the same good or service to different consumers at different prices is called:

price discrimination.

The practice of selling the same good or service to different consumers at different prices is known as:

price discrimination.

Total revenue equals:

price times quantity.

Governments usually _ monopolies when the fixed costs associated with the production of a(n) _ good or service are relatively high and it may not make sense to have multiple firms duplicating these fixed costs.

regulate or essential; necessary or necessity

If you live in a town or a city that has a single provider of electricity or natural gas, the natural monopoly provider is most likely a(n) _ monopoly.

regulated

Total _ equals price times quantity.

revenue