Econ ch 15

1. increasing competition with antitrust laws 2. regulation 3. public ownership 4. do nothing

public policy toward monopolies

for a monopolist, when does marginal revenue exceed average revenue? a. never b. when output is less that the profit-maximizing level of output c. when output is greater than the profit-maximizing level of output d. for all levels of output greater than zero

a

patent and copyright laws encourage a. creative activity b. lower prices due to decreasing average total cost c. competition among firms d. all of the above

a

the fundamental source of monopoly power is a. barriers to entry b. profit c. decreasing average total cost d. a product without close substitutes

a

anti-trust laws have economic benefits that outweigh the costs if they a. prevent mergers that would decrease competition and lower the costs of production b. prevent mergers that would decrease competition and raise the cost of production c. allow mergers that would decrease competition and raise the cost of production d. none of the above are correct because antitrust laws never have economic benefits that outweigh the costs

b

the market demand curve for a monopolist is typically a. unit prive elastic b. downward sloping c. horizontal d. vertical

b

when a certain monopoly sets its price a $8 it sells 64 units. when the monopoly sets its price at $10 it sells 60 units. the marginal revenue for the firm over this range is a. $11 b. $22 c. $33 d. $44

b

1. monopoly resources 2. government regulation 3. the production process

barriers to entry

Which of the following statements is correct? a. both a competitive firm and a monopolist are price takers b. both a competitive firm and a monopolist are price makers c. a competitive firm is a price taker, whereas a monopolist is a maker d. a competitive firm is a price maker, whereas a monopolist is a price taker

c

which of the following is an example of public ownership of a monopoly a. DeBeers b. Microsoft c. USPS d. AT&T

c

-price taker -one producer of many -demand is a horizontal line (price)

competitive firm

if a monopoly lowers its price, its a. total revenue must increase b. total revenue must decrease c. marginal revenue must increase d. marginal revenue must decrease

d

when a single firm can supply a product to an entire market at a lower cost than could two or more firms, the industry is called a. resource industry b. exclusive industry c. government monopoly d. natural monopoly

d

can sometimes improve market outcome

government

alters the relationship between a firm's costs and the selling price

market power

-price maker -sole producer -downward sloping demand: the market demand curve

monopoly

charges a price that exceeds marginal cost

monopoly

firm that is the sole seller of a product without close substitutes

monopoly