question
Compared to a firm under perfect competition, a monopolist
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charges more and produces less
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Firms with market power
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have the ability to affect price
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A monopoly is characterized by
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selling a good for which there are no close substitutes
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The price chosen by a monopolist
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is independent of the production of other firms
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True/False
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a monopolist can increase the price of its product and not lose all of its business
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A fundamental feature of a monopolistic market is that the firm
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faces the price and quantity trade-off dictated by market demand
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The monopoly market structure is characterized by
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high barriers to entry
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A ________ is the privilege granted to an individual or company by the government that gives them the sole right to produce and sell a good
answer
patent
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You are good at creating Web sites. You make a social media Web site similar to Facebook, but after a while your Web site does not get enough attention and your business fails. This is because
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of the network externality already established for Facebook
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If a monopolist decides to charge a higher price for its product, it will yield a ________ revenue per unit sold and ________ number of units sold
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higher; lower
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For a monopolist,
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marginal revenue < price
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Which of the following is true of a decrease in product prices
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when the price effect dominates the quantity effect, total revenue decreases
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Which of the following characterizes the relation between total revenue and marginal revenue for a firm with market power
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marginal revenue is zero when total revenue is maximized
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If a firm can sell 15 units of output for $10 each or 14 units at $12 each, the additional revenue from selling the fifteenth unit is
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-$18
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The outcome of first-degree price discrimination is
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efficient with inequity
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A certain amusement park offers a 50 percent discount to kids between the ages of 8 and 14 years. This is an example of
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third-degree price discrimination
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Second-degree price discrimination occurs when
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consumers are charged different prices based on the characteristics of their purchases
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Which of the following firms is most likely to spend on innovation
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a firm that enjoys some monopolistic power, but faces strong competition from its rival
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The policy that aims to regulate and prevent anti-competitive pricing in the United States is referred to as ________ policy
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antitrust
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Which of the following does a social planner necessarily need to know to restore efficiency in a monopoly market
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the monopolist's marginal costs and the buyers' willingness to pay for the good
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A monopsony pays a price
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lowers than marginal willingness to pay
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In the case of consumers monopsony
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market output is lower than the welfare maximizing level
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Over the last three decades American industries
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became more concentrate, which could work to decrease employees' wages
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