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