question
"No firm is completely sheltered from rivals; all firms compete for consumer dollars. If that is so, then pure monopoly does not exist." A monopoly is more likely to persist if there...
answer
are no subsititutes
question
Which of the following is not a major barrier to entry into an industry?
answer
diminishing marginal returns
question
Which of the following is true?
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unfair competition is a barrier with no social justification
question
The demand curve faced by a purely monopolistic seller...
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is downward sloping, whereas that facing the purely competitive firm is perfectly elastic
question
The demand curve facing a...
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purely competitive firm is perfectly elastic because the purely competitive firm may sell that is wishes at the equilibrium price
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The pure monopolist's demand curve is not...
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perfectly inelastic because MR is negative when demand is inelastic, so MR=MC < 0
question
Assume a monopolistic publisher agrees to pay an author 10 percent of the total revenue from text sales.
Which of the following statements is true?
Which of the following statements is true?
answer
the author would prefer a lower price than the publisher
question
Assume that pure monopolist and a purely competitive firm have the same unit costs. In this case, determine what is true with respect to (a) price, (b) output, and (c) profits.
answer
1. P(monopoly) > P(competition)
5. Q(monopoly) < Q(competition)
7. Profit(Monopoly) > Profit(Competition)
5. Q(monopoly) < Q(competition)
7. Profit(Monopoly) > Profit(Competition)
question
Assume that pure monopolist and a purely competitive firm have the same unit costs. In this case, resources will be allocated...
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inefficiently because the monopolist does not produce at the point of minimum ATC and does not equate price and MC
question
Even though both monopolists and competitive firms follow the MC=MR rule in maximizing profits, there are difference in the economic outcomes because the...
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pure competitor is small with no market power
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The costs of purely competitive firm and a monopoly could be different because...
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the monopoly might experience economies of scale not available to the competitive firm
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If a monopoly can experience economies of scale,...
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the monopolist can reduce the price below a pure competitor and improve resource allocation
question
Even though De Beers produced only 45 percent of the world's diamonds, it was able to control the world price of diamonds over the past several decades by...
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controlling the marketing of rough-cut diamonds
question
De Beer's new strategy for earning economic profit rather than just normal profit is it...
answer
distinguish its product as having higher quality?
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