question
One widely watched government antitrust action involved Microsoft corporation. In that case;
answer
Microsoft agreed to give computer manufacturers more freedom to install software written by Microsoft's competitors.
question
Imperfect competition...
answer
Results in a less efficient market outcomes
question
For a monopoly, the marginal revenue curve has _____ point(s) in common with the firm's linear demand curve.
answer
One
question
For a perfectly competitive firm, the marginal revenue curve has _____ point(s) in common with the firm's demand curve.
answer
All
question
In interpreting the Sherman Act, the Supreme Court developed the Rule of Reason, which says that a firm may be found guilty of violating the law;
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Only if its conduct is unreasonable
question
One of the major characteristics of pure monopoly is;
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There is only one firm in the industry
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Firms with market power must decide all of the following EXCEPT;
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How much to supply in each input market
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If a monopolist is at a point on its demand curve such that marginal revenue is less than marginal cost, then it can increase profit by
answer
Increasing price and decreasing output
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When a defendant is found guilty of violating the antitrust laws, the court may require the defendant;
answer
To dispose of a subsidiary, create a competitor, divulge technical know-how, or sell goods or services.
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The term "rent seeking" refers to;
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Any actions taken to protect positive profits
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Fora monopoly, price is equal to marginal revenue because a monopoly has the power to control price. This statement is...
answer
Incorrect because price is greater than marginal revenue
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Because a monopoly is the only firm in an industry, it can charge virtually any price for its product. The statement is...
answer
Incorrect because a monopoly is constrained by consumer demand.
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It is always true when demand elasticity is equal to -1, marginal revenue is equal to 0. This is...
answer
Correct
question
Suppose we know that a monopolist is maximizing its profits. Which of the following is a correct inference? "The monopolist has....
answer
Equated marginal revenue and marginal cost
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Actions to enforce the antitrust laws are initiated...
answer
by the Antitrust Division of the Justice Dept, the FTC, and private firms or citizens.
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One of the major characteristics of pure monopoly is...
answer
There are severe barriers to entering the industry
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When ____ substitutes exist, a firm in an imperfectly competitive industry has ____ power to raise price.
answer
More; less
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Unlike for perfectly competitive firms, whose marginal revenue curves are the same as their individual demand curves, a monopolist's marginal revenue curve differs form its demand curve because...
answer
A monopoly must lower the price on all units to sell one more unit of output.
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The _____ broadly a market is defined; the more difficult it becomes to find _____.
answer
More; substitutes
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A firm must be able to _____ competition if it is to exercise control over the price of its product.
answer
Limit
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In order to maximize its profit, a monopolist;
answer
Decides price and output simultaneously
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In a monopoly, the market demand curve is;
answer
The same as the demand curve facing the firm
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When a monopolist sells two units of output its total revenue is $600. When a monopolist sells three units of output its total revenue is $630. When the monopolist sells three units of output, the price per unit is;
answer
$210
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When the demand curve is a downward sloping straight line, the slope of the marginal revenue curve is;
answer
Twice as steep at the demand curve.
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A market where there is only one buyer for a good or service is called a monopoly (T or F)
answer
False
question
Rent seeking in the form of lobbying for an increase in import tariffs by domestic producers
answer
increases the deadweight loss.
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A coffee manufacturer raises the price of its coffee by 10%, and the quantity demanded of its coffee falls by only 12%. This firm has....
answer
Some market power
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Market power refers to a firm's ability to;
answer
Raise price without losing all sales of its product
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