MICRO Monopoly

Question 1

Complex monopoly

Answer 1

A complex monopoly exists when firms tactically collude and act as a single supplier.

Question 2

Natural Monopoly

Answer 2

• Occurs when the most efficient number of firms in the industry is one, typically due to very high fixed costs.
• Long run average costs continuously fall over a large range of outputs.

Question 3

Monopoly Characteristics

Answer 3

• One firm with complete market share
• High barriers to entry
• Large economies of scale
• Price maker