Characteristics of Monopoly quiz #2 Flashcards
Characteristics of Monopoly quiz #2
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Which of the following are potential barriers to entry that could lead to a monopoly market?
Ownership of key resources, government regulation, economies of scale. Which of the following is a characteristic of a natural monopoly?
High fixed costs and economies of scale. Which of the following scenarios best represents the pricing behavior of a monopolist?
A monopolist lowers price to sell more units. Monopolists are criticized because they are inefficient. What is meant by this statement?
Monopolists restrict output and charge higher prices, leading to deadweight loss. Which market structure is defined by a single producer?
Monopoly. Which of the following is not a characteristic of a monopoly?
Free entry and exit. Which of the following two terms are synonymous in a pure monopoly?
Firm and industry. Which of the following is a potential barrier to entry into a monopoly market?
Government-issued patents. What did monopolies threaten?
Monopolies threaten competition and consumer choice. Which of the following is true about a perfect price discriminating monopolist?
It charges each consumer the maximum they are willing to pay. Which of the following phrases describes a monopoly market?
Single seller, unique product, barriers to entry. A monopolist is able to maximize its profits by
Producing where marginal revenue equals marginal cost. A monopolistically competitive firm may earn abnormally high profits in the
Short run. A monopolist maximizes profits by
Setting output where marginal revenue equals marginal cost. By charging consumers the highest price they are willing and able to pay, the pure monopoly:
Engages in perfect price discrimination. Which of the following reasons explains why a professional sports team can be considered a monopoly?
It is the sole provider of a unique product in a specific location. Which of the following are properties of a monopoly? (check all that apply.)
Single seller, price maker, barriers to entry. Which of the following is an example of a price-discriminating monopoly?
Airlines charging different fares for the same flight. The MR curve of a perfectly competitive firm is horizontal. The MR curve of a monopoly firm is:
Downward sloping. What is a non price discriminating monopoly?
A monopoly that charges the same price to all consumers. The additional revenue a monopolist receives from selling an additional unit of output is
Marginal revenue. Which of the following is a reason for a monopoly's loss of economic profit?
Rising costs or falling demand. The lack of competition within a monopoly means that
The monopolist can set prices above competitive levels. A firm that holds a monopoly position in the marketplace is
A price maker with market power. Indicate the point where a monopoly will set its output.
Where marginal revenue equals marginal cost. Select the correct location on the graph. Indicate the point where a monopoly will set its price.
At the price corresponding to the profit-maximizing output on the demand curve. A monopoly is a market that has
One producer and no close substitutes. Which of the following is a source of monopoly power?
Ownership of key resources. Which of the following suppliers is most likely to be a monopolist?
A local water utility. Which of the following is an example of monopolistic competition?
Restaurants offering different cuisines in a city. Monopolies are socially inefficient because the price they charge is
Higher than marginal cost, reducing consumer surplus. A monopoly is characterized by all of the following except
Many sellers. One defining characteristic of pure monopoly is that the
Firm is the sole producer in the market. In economics, a firm that faces no competitors is referred to as _________________.
A monopoly. There are many differences between a market served by a monopoly and a market served by perfect competition. Name one.
A monopoly sets prices, while perfect competition has price takers. Market segregation must exist in order for a monopolist to
Engage in price discrimination. A monopolist does not have a supply curve because:
It sets both price and quantity, not responding to market price. For a monopolistic firm, the demand for its product is
The market demand curve, which is downward sloping. A government-created monopoly arises when
The government grants exclusive rights, such as patents. Monopoly firms face
Downward-sloping demand curves.
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