Chapter 9

Question 1

Monopoly

Answer 1

One single seller, product has no close substitutes, barriers to entry

Question 2

Supply Point

Answer 2

Monopolist has a supply point on the demand curve above where marginal revenue = marginal cost

Question 3

Monopoly Power

Answer 3

The ability of a firm to charge a price higher than marginal cost, price - marginal cost

Question 4

Anti-combine Laws

Answer 4

Laws that prohibit monopoly practices by imposing fines or applying criminal law on monopolists

Question 5

Government Regulation

Answer 5

Government forces the the monopolist to charge a specific price

Question 6

Marginal Cost Pricing

Answer 6

Government forces the monopolist to set price = marginal cost

Question 7

Average Cost Pricing

Answer 7

Government forces the monopolist to set price = average total cost

Question 8

Price Discrimination

Answer 8

Charging different prices for the same good, there must be monopoly power, market segregation and no chance of resale

Question 9

Patent

Answer 9

Protects producer from competition for a certain period of time where they can act as a monopolist