Monopolies

which of the following is NOT a barrier to entry

U.S. antitrust legislation

which of the following statements is FALSE

a monopolist may have very close substitutes for the product produced by the firm

a monopolist can earn profits in the long run because

barriers to entry prevent new firms from entering the industry

in order for a firm to receive monopoly profits in the long run, there must be

barriers to market entry

which of the following is NOT a restriction the government imposes to keep potential entrants out of a market

cartels

with price discrimination a monopolist will

charge a lower price to consumer whose demand is more elastic

a price discriminating monopolist will equate

charge higher prices to consumers who desire a product more than those who value it less

in the figure above, if the firm is producing at Q3 and charging a price of P3 it should

decrease output and increase price

the demand curve a monopolist faces is

downward sloping

in order to price discriminate, a firm must

face a downward-sloping demand curve

if a firm sells 10 units of output at $100 per unit and 11 units of output when price is reduced to $99, its marginal revenue for the last unit sold is

for a profit-maximizing monopolist, marginal revenue equals marginal cost

the monopolist's demand curve is

identical with the industry demand curve

In the figure above, if the firm is producing Q1 units at a price P1, the firm should

increase output and decrease price

a monopolist faces a demand curve that

is downward sloping

for a firm facing a downward sloping demand curve, marginal revenue

is greater at higher prices than at lower prices

the demand curve faced by the pure monopolist

is the market demand curve

compared to competitive firms, the demand curve for a monopolist will be

less elastic

If there are no barriers to entry into an industry,

long-run economic profits must be zero

which of the following would NOT be a barrier to entry for a particular market

low cost of obtaining initial capital

a monopolist's marginal revenue curve is

lower than product price

to sell one more unit of a good, a monopolist must

lower the price on all units

under monopoly, resources are misallocated such that

too few resources are used by the monopoly, too many are used elsewhere

a price discriminating firm will charge more to the customers who

want the product relatively more than other customers

for a monopolist who is maximizing profits,

price exceeds marginal cost

compared to the efficient competitive industry result, the monopolist will

produce less output and charge a higher price

economists criticize monopolists because monopolies

restrict output and raise prices compared to a competitive situation

a monopolist will not be able to make a positive profit at any price-output combination when

the average total cost curve is sverywhere above the demand curve

the conclusion that monopoly results in lower output and higher price than perfect competition relies on the assumption that

the costs of production are the same whether the industry is perfectly

the demand curve a monopolist faces is

the industry demand curve

which of the following is NOT necessary in order for a monopolist to practice discrimination?

the marginal cost providing the same good to different groups of buyers must be different.

the major difference between a monopolist and a perfectly competitive firm

the monopolist's marginal revenue curve lies below its demand curve

conclusions about the misallocation of resources under conditions of monopoly depend, in part, on the crucial assumption that

the monopolization of a perfectly competitive industry does not change the cost structure of the industry

Which of the following statements is FALSE?

the profit-maximizing monopolist will always charge the highest price possible for its product

an important difference between a perfect competitor and a monopolist is

the shape of the demand curve each faces

assuming that marginal revenue equals $5 and average total cost equals $8, a monopolist who wishes to maximize profits should set product price at

$5

in the figure above, at the firm's profit-maximizing level of output, total revenue is rectangle

0P1 AQ1

a patent provides legal protection for an invention for

20 years

a monopolist will not earn any economic profits when

ATC lies above the demand curve

in the figure above, the difference between the competitive industry price and that of the monopolist is

C

The profit maximizing price and quantity established by the unregulated monopolist in the figure above are

Q1 units of output and a price of P1

according to the figure above, the profit maximizing output for the monopolist is

K

the monopolist will choose the price and output combination where

MC equals MR

In equilibrium, which of the following conditions is common to both unregulated monopoly and pure competition?

MR=MC

in the figure above, the total cost of producing the profit-maximizing level of output is shown by rectangle

P2 BQ4

In the figure above, marginal cost and marginal revenue are equal at output level

Q1

In the figure above, if the firm is producing Q2 units ar a price P2, it should

not change output or price

suppose a monopolist's costs and revenues are as follows: ATC=$45.00; MC=35.00;MR=$35.00; P=$45.00. The firm should

not charge output or price

for the monopolist, marginal revenue is

not considered in the firm's pricing