Chapter 22 - Flashcards
Which statement is false?
- A monopoly is both a firm and an industry
- A monopoly is an imperfect competitor
- There are no monopolies in the US
- None of these statements is false
There are no monopolies in the US
Which statement is false:
- The monopolists demand and marginal revenue curves are two separate curves
- The monopolist can sell more output only by lowering price
- The monopolist produces at the minimum point of her ATC curve
- None of these statements are false
The monopolist produces at the minimum point of her ATC curve
Which statement is true?
- All monopolists products have close subsitutes
- Most firms in the US are monopolies
- There are no monopolies in the US
- A monopoly is a firm that produces all the output in an industry
- none of these are true
A monopoly is a firm that produces all the output in an industry
The monopolist produces where:
- where MC=MR
- at the minimum point of ATC
- at maximum output
- where prices is highest
where MC=MR
Which statement is true?
- The monopolist cannot lose money
- The monopolist always operates a large firm
- The monopolist will not lose money in the short run
- The monopolist will not lose money in the long run
The monopolist will not lose money in the long run
The most efficient output is found:
- where MC and MR cross
- at the bottom of the ATC curve
- when the demand and MR curves are equal
- where the ATC and demand curves cross
At the bottom of the ATC curve
An example of government ownership of a monopoly would be:
- The Tennesse Valley Authority
- The New York State Public Service Commission
- ATT
- General Motors
The Tennesse Valley Authority
Which statement is true?
- The monopolist most efficient output is her most profitable output as well
- The monopolist charges a higher price than the perfect competitor in the long run
- All monopolists have control over an essential resource
- None is true
The monopolist charges a higher price than the perfect competitor in the long run
Which statement is true?
- All monopolies are very large firms
- Most monopolists do not produce at an output in which MC=MR
- The monopolists demand curve and MR curve are identical
- None is true
None is true
A monopolist operates at the minimum point of her ATC curve
- only in the short run
- only in the long run
- in both the short run and the long run
- in neither the short run nor the long run
in neither the short run nor the long run
If the government attempts to break up a natrual monopoly to enforce competition in an industry:
- the average cost of producing the good will increase
- the smallest firm will have a significant cost advantage over the larger efficient firims
- the average cost of producing the good will decrease
- the price paid by consumers will be expected to remain the same
the average cost of producing the good will increase
In the United State, natural monopolies:
- are easily converted to competitive industries
- are common in retailing
- are commonly regulated by governments
- are rarely regulated by governements
are commonly regulated by governments
Patents function to
- establish permanent monopolies
- temporarily protect monopoly power
- encourage firms to reduce output
- reduce monopoly power
temporarily protect monopoly power
Monopoly firms are
- always very large
- usually very large
- sometimes very large
- never very large
sometimes very large
A public utility would be an example of
- a natural monopoly
- an unnatural monopoly
- an unregulated private monopoly
- a government monopoly
- a competitive monopoly
a natural monopoly
Monopoly profit
- equals (price - ATC) times quantity sold
- equals price times quantity sold
- exists only in the short run
- existis because no entry barriers exist
equals (price - ATC ) times quanitity sold
When an industry is a natural monopoly
- the economies of scale in it are very great
- it would be most efficient to have several (or many) firms competiing in the the market
- it has a perfectly elastic industry demand curve
- the typical firm’s marginal cost curve is everywhere above its average curve
the economies of scale in it are very great
The perfect competitor ___________________ produces at the output at which MC=MR, the monopoly ________________ produces at the output at which MC=MR
- always; always
- sometimes; sometimes
- always; sometimes
- sometimes; always
always; always
Which statement is true?
- some monopolists are imperfect competitors
- most monopolists are imperfect competitors
- all monopolist are imperfect competitiors
- none is true
All monoplists are imperfect competitors
Which of the following companies is NOT a natural monopoly?
- the international Nickel Company
- California Edison
- Southwestern Bell
- Keyspan Gas Company
The International Nickel Company
A monopolists makes a profit
- only in the short run
- only in the long run
- in both the short run and the long run
- in neither the short nor long run
in both the short and long run
Which statement is true?
- Since the monopolist is the only firm in the industry, her profit is calculated differently from the way a perfect competitor would calculate his profit
- The monopolist’s demand curve and marginal revenue curve are the same
- in the long run under monopoly, the most efficient output is the most profitable output
- a monopolist can lose money
A monopolist can lose money
Each of the following is a legal barrier to entry into an industry except:
- licensing
- patents
- governement franchises
- brand names
brand names
Which statement is true?
- one basis for monopoly is control over an essential resource
- monopoly is illegal in the United States
- The economies of being established is the same as the economies of scale
- General Motors is a monopoly
One basis for monopoly is control over an essential resource
Which statement is true?
- Monopolies tend to be inefficient
- Most industries in the United States are monopolies
- All electric power companies are natural monopolies that do not have competition
Monopolies tend to be inefficient
