question
Which of the following are reasons that a monopolist is considered to have market power? Select all that apply.
The monopolist controls marketing.
The monopolist exerts some control over the price.
The monopolist controls demand.
The monopolist controls the quantity supplied.
The monopolist controls marketing.
The monopolist exerts some control over the price.
The monopolist controls demand.
The monopolist controls the quantity supplied.
answer
The monopolist exerts some control over the price.
The monopolist controls the quantity supplied.
The monopolist controls the quantity supplied.
question
Firms with market power have demand curves sloping in which direction?
Upward
Horizontal
Downward
Upward
Horizontal
Downward
answer
Downward
question
A monopoly exists when a single firm is the _____ producer of a product.
Multiple choice question.
largest
sole
most efficient
smallest
Multiple choice question.
largest
sole
most efficient
smallest
answer
sole
question
Marginal revenue for the competitive seller is constant and ______ price, whereas for the pure monopolist it is not constant and reflects the necessity of ______ the price to sell more output.
equal to; lowering
less than; lowering
equal to; regulating
greater than; lowering
equal to; lowering
less than; lowering
equal to; regulating
greater than; lowering
answer
equal to; lowering
question
In a monopoly, because the demand curve is downward sloping, ______ is less than the price.
marginal revenue
total cost
total revenue
marginal cost
marginal revenue
total cost
total revenue
marginal cost
answer
marginal revenue
question
A monopolist has market [power] because it controls the quantity produced and thus has some control over the price.
answer
power
question
Firms with downward-sloping (supply/demand) curves have market power.
answer
demand
question
The change in total revenue given a change in quantity sold is called [marginal] revenue.
answer
marginal
question
Which of the following are examples of a monopoly? Select all that apply.
A small town with one restaurant
A small town with more than one restaurant
A small town with one railroad
A small town with one airline
A small town with one restaurant
A small town with more than one restaurant
A small town with one railroad
A small town with one airline
answer
A small town with one restaurant
A small town with one railroad
A small town with one airline
A small town with one railroad
A small town with one airline
question
Regardless of industry structure, a firm positions itself in the best profit-maximizing (or loss-minimizing) level of production if that amount of output reflects the point at which the last unit's marginal revenue is equal to its marginal cost. Why? (Select all that apply.)
Each unit of output prior to the MR = MC rule earns more revenue for the firm than its costs.
Total revenue is greatest by producing after the quantity determined by the MR = MC rule.
Each unit of output after the MR = MC amount will earn less revenue than its costs.
Total revenue is greatest at amounts prior to the MR = MC amount.
Each unit of output prior to the MR = MC rule earns more revenue for the firm than its costs.
Total revenue is greatest by producing after the quantity determined by the MR = MC rule.
Each unit of output after the MR = MC amount will earn less revenue than its costs.
Total revenue is greatest at amounts prior to the MR = MC amount.
answer
Each unit of output prior to the MR = MC rule earns more revenue for the firm than its costs.
Each unit of output after the MR = MC amount will earn less revenue than its costs.
Each unit of output after the MR = MC amount will earn less revenue than its costs.
question
What are the characteristics of marginal revenue for the monopolist compared to that of a perfect competitor?
Constant and equal to product price
Constant and higher than product price
Fluctuating and higher than product price
Declining and lower than product price
Constant and equal to product price
Constant and higher than product price
Fluctuating and higher than product price
Declining and lower than product price
answer
Declining and lower than product price
question
In order to sell an extra unit of output, the monopolist must lower the price on all units sold, not just on the last (extra) one. For this reason, _____ for monopolies.
price = marginal revenue
price < marginal revenue
price > marginal revenue.
price = marginal revenue
price < marginal revenue
price > marginal revenue.
answer
price > marginal revenue.
question
Entry is completely blocked to competitors in the market structure of [monopoly] . (Insert one word in the blank.)
answer
monopoly
question
The ability to alter the _____ of a product is the essence of market power.
price
uses
quality
price
uses
quality
answer
price
question
The selection of the short-run rate of output with existing plants and equipment is known as the short-run [production] decision.
answer
production
question
The formula used for the computation of marginal revenue (ΔTR/ΔQ) applies
only to competitive firms.
only to firms having market power.
to both competitive firms and monopolies.
only to competitive firms.
only to firms having market power.
to both competitive firms and monopolies.
answer
to both competitive firms and monopolies.
question
Once a monopolist identifies the profit-maximizing rate of output, the [demand] curve shows how much consumers are willing to pay for that specific quantity of output.
answer
demand
question
A monopolist uses the rule of marginal revenue equals marginal cost to determine the profit-maximizing [production] and price.
answer
quantity, production, output, or supply
question
Which of the following can be used to compute economic profit? (Select all that apply.)
(MR-ATC)×Q
(P-ATC)×Q
TR-TC.
(P-AVC)×Q
(MR-ATC)×Q
(P-ATC)×Q
TR-TC.
(P-AVC)×Q
answer
(P-ATC)×Q
TR-TC.
TR-TC.
question
In monopoly, the barriers to entry are
prohibitively high.
high but surmountable.
slightly higher than in competitive markets.
prohibitively high.
high but surmountable.
slightly higher than in competitive markets.
answer
prohibitively high.
question
A _______ will use its power over product output and price whenever it is advantageous for the monopoly to do so.
perfect competitor
price making firm
monopolist
price taking firm
perfect competitor
price making firm
monopolist
price taking firm
answer
price making firm
monopolist
monopolist
question
The selection of the short-run rate of output with existing plants and equipment is known as the
marginal revenue decision.
sales decision.
production decision.
price decision
marginal revenue decision.
sales decision.
production decision.
price decision
answer
production decision.
question
_______ prevent(s) competitive firms from entering the market and therefore preserve(s) profits in the monopoly market.
High prices
The existence of profits
The existence of one firm
Barriers to entry
High prices
The existence of profits
The existence of one firm
Barriers to entry
answer
Barriers to entry
question
Once a monopolist identifies the profit-maximizing rate of output, the _______ curve shows how much consumers are willing to pay for that specific quantity of output.
demand
supply
marginal cost
marginal revenue
demand
supply
marginal cost
marginal revenue
answer
demand
question
Consumers are accurately informed of the true opportunity cost of various goods through _____ pricing.
monopoly
cutthroat
marginal cost
monopoly
cutthroat
marginal cost
answer
marginal cost
question
[monopoly] profit is found by multiplying per-unit profit at the profit-maximizing output (the difference between price and average total cost) by the profit-maximizing output.
answer
Economic, Total, or Monopoly
question
Which of the following statements explains how a monopolist changes the price of its product?
By changing the quantity of the product it produces
By changing the quality of the product it produces
It is unable to change the price of its product
By changing the input costs of the product it produces
By changing the quantity of the product it produces
By changing the quality of the product it produces
It is unable to change the price of its product
By changing the input costs of the product it produces
answer
By changing the quantity of the product it produces
question
Barriers to entry prevent competitive firms from entering the market and therefore preserve _______ in the monopoly market.
low costs
zero economic profit
high costs
profits
low costs
zero economic profit
high costs
profits
answer
profits
question
A monopolist can increase its profit by
producing where marginal revenue is equal to the minimum average total cost.
producing where price is equal to marginal cost.
charging different prices to different buyers.
producing where marginal revenue is greater than marginal cost.
producing where marginal revenue is equal to the minimum average total cost.
producing where price is equal to marginal cost.
charging different prices to different buyers.
producing where marginal revenue is greater than marginal cost.
answer
charging different prices to different buyers.
question
Which firm(s) supply goods at prices equal to their marginal cost?
Perfect competitors
Monopolistic competitors
Monopolists
Oligopolists
Perfect competitors
Monopolistic competitors
Monopolists
Oligopolists
answer
Perfect competitors
question
As an example of price [discrimination], airlines charge higher fares to business travelers whose demand for travel is price inelastic and lower more restricted fares to attract vacationers and others with price-elastic demand. (Insert one word in the blank, and be careful with your spelling.)
answer
discrimination
question
A monopolist uses the marginal revenue equals marginal cost rule to determine the
profit-maximizing output only.
best amount to spend on labor costs.
profit-maximizing output and price.
profit-maximizing price only.
profit-maximizing output only.
best amount to spend on labor costs.
profit-maximizing output and price.
profit-maximizing price only.
answer
profit-maximizing output and price.
question
The highest barriers to entry are found in the [monopoly] market structure. The lowest barriers to entry can be found with perfect [competition].
answer
Blank 1: monopoly or monopolistic
Blank 2: competition or competitors
Blank 2: competition or competitors
question
Which statement concerning monopolists and a product's price is true?
A monopolist can change its product's price by changing the cost of competitors' products.
A monopolist produces an optimal combination of goods in the market.
A monopolist can change its product's price by changing the quantity supplied of the product.
A monopolist is a price taker in an industry.
A monopolist can change its product's price by changing the cost of competitors' products.
A monopolist produces an optimal combination of goods in the market.
A monopolist can change its product's price by changing the quantity supplied of the product.
A monopolist is a price taker in an industry.
answer
A monopolist can change its product's price by changing the quantity supplied of the product.
question
All of the following are examples of barriers to entry, except:
patents
income
acquisition
lawsuits
patents
income
acquisition
lawsuits
answer
income
question
Which of the following can increase profits by charging different prices to different buyers?
A monopoly
A perfectly competitive firm
A monopoly
A perfectly competitive firm
answer
A monopoly
question
Which of the following is an example of price discrimination?
Charging all customers the exact same price
Charging different customers different prices
Charging each customer the minimum price he or she is willing to pay
Charging all customers the exact same price
Charging different customers different prices
Charging each customer the minimum price he or she is willing to pay
answer
Charging different customers different prices
question
Patents provide the inventor with a(n) (monopoly/oligopoly) position for the life of the patent.
answer
monopoly
question
Barriers to entry contribute to (monopoly/oligopoly) status.
answer
monopoly
question
Monopoly [franchise] is a barrier to entry in which the government gives exclusive rights to a firm to supply a particular good or service, even though other firms could produce it.
answer
franchising, franchises, or franchise
question
Economic profit for a monopolist can be calculated by (multiplying/dividing) the difference between P and ATC by quantity.
answer
multiplying
question
______ of a key input is a barrier to entry into an industry.
Sale
Mergers
Deterioration
Control
Sale
Mergers
Deterioration
Control
answer
Control
question
Control of key inputs, economies of scale, acquisition, and monopoly franchises are all types of ______.
production strategies
non-price competition
economies of scale
barriers to entry
production strategies
non-price competition
economies of scale
barriers to entry
answer
barriers to entry
question
Firms with market power are motivated to charge different prices to different buyers because doing so enables them to increase ______.
consumption
sales
profit
consumption
sales
profit
answer
profit
question
True or false: In general, perfectly competitive firms are in a better position to undertake research and development than monopolies are.
True false question.
True
False
True false question.
True
False
answer
False
In general, monopolies are in a better position to undertake research and development than perfectly competitive firms are.
In general, monopolies are in a better position to undertake research and development than perfectly competitive firms are.
question
Patents provide the inventor with a monopoly position for what length of time?
For the life of the inventor
One year
Indefinitely
Twenty years
For the life of the inventor
One year
Indefinitely
Twenty years
answer
Twenty years
question
The incentives argument for market power holds entrepreneurial activity will be stimulated by the _____ that comes with acquiring such power.
political clout
fame and notoriety
greater profit
political clout
fame and notoriety
greater profit
answer
greater profit
question
The Howard Johnson restaurant company once held the exclusive right to sell food along the Pennsylvania Turnpike, a restricted access highway. The entry of competitors was in this case blocked by
a patent.
a monopoly franchise.
the control of a key input.
a patent.
a monopoly franchise.
the control of a key input.
answer
a monopoly franchise.
question
The Aluminum Company of America (ALCOA) once controlled the supply of bauxite, an input vital to the production of aluminum. The resulting barrier to entry took the form of
a monopoly franchise.
a patent.
control of key inputs.
a monopoly franchise.
a patent.
control of key inputs.
answer
control of key inputs.
question
Local phone calls, natural gas distribution, wireless communication, and cable television are all examples of ______.
natural monopolies
oligopolies
perfect competitors
natural monopolies
oligopolies
perfect competitors
answer
natural monopolies
question
An imperfectly competitive industry subject to potential entry if prices or profits increase is known as a [contestable] market.
answer
contestable
question
Which of the following are reasons that many monopolies conduct research and development? Select all that apply.
R&D turns the monopoly into a price taker.
They are sheltered from competition.
They have the resources (profits) to do so.
R&D turns the monopoly into a price taker.
They are sheltered from competition.
They have the resources (profits) to do so.
answer
They are sheltered from competition.
They have the resources (profits) to do so.
They have the resources (profits) to do so.
question
The incentives argument for market power holds that the greater profit "prizes" that come with having such power will stimulate _____ activity.
political
entrepreneurial
regulatory
political
entrepreneurial
regulatory
answer
entrepreneurial
question
The federal government is using its legal authority to ______.
dismantle Microsoft and replace it with many small competitors
force changes in Microsoft's behavior and structure
dismantle Microsoft and replace it with many small competitors
force changes in Microsoft's behavior and structure
answer
force changes in Microsoft's behavior and structure
question
A good example of a natural monopoly is ______.
an orange farmer
Microsoft
a public utility
a restaurant
an airplane manufacturer
an orange farmer
Microsoft
a public utility
a restaurant
an airplane manufacturer
answer
a public utility
question
According to the notion of contestable markets, monopoly behavior will be restrained by
rules and regulations.
the threat of lawsuits.
potential competition.
rules and regulations.
the threat of lawsuits.
potential competition.
answer
potential competition.
question
Which of the following are among Google's alleged bad behaviors? Select all that apply.
Exploitation of low-wage workers
Overpriced software
Unfairly steering users to its related services
Suppression of competition
Intellectual property theft
Exploitation of low-wage workers
Overpriced software
Unfairly steering users to its related services
Suppression of competition
Intellectual property theft
answer
Unfairly steering users to its related services
Suppression of competition
Suppression of competition
question
Which of the following are among Microsoft's alleged bad behaviors?
Multiple select question.
Intellectual property theft
Tax avoidance
Overpriced software
Unfair treatment of potential competitors
Suppression of substitute technologies
Multiple select question.
Intellectual property theft
Tax avoidance
Overpriced software
Unfair treatment of potential competitors
Suppression of substitute technologies
answer
Overpriced software
Unfair treatment of potential competitors
Suppression of substitute technologies
Unfair treatment of potential competitors
Suppression of substitute technologies
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
