EC350 MONOPOLY AND ANTITRUST POLICY
Natural monopoly happens when the: - Answer -average total cost curve is decreasing
Which point on this graph corresponds to a natural monopoly serving this market and
breaking even? - Answer -Point A
Which of the following is an effect of a monopoly? - Answer -Monopoly causes a
reduction in consumer surplus
What is the firm's profit when it sells six subscriptions per month? - Answer -$72
A monopolist will maximize profit at the level of output where: - Answer -marginal cost
equals marginal revenue
Which of the following statements regarding natural monopoly is true? - Answer -
Natural monopoly is most likely to occur in markets where fixed costs are large relative
to variable costs.
A patent gives its holder the exclusive right to a product for a period of __________
from the date the patent is filed with the government. - Answer -20 years
Which of the following laws outlawed monopolization? - Answer -The Sherman Act
The monopolist produces an output that is __________ the perfectly competitive
industry would produce. - Answer -less than
Governments deal with natural monopolies by: - Answer -using regulations to protect
consumers
Price discrimination is the practice of: - Answer -Dividing consumers into two or more
groups and charging different prices to each group.
The monopolist charges a price that is __________ the perfectly competitive industry. -
Answer -higher than
Which of the following rights is given to the holder of a patent? - Answer -the exclusive
right to a new product
In which of the following market structures is the firm's demand curve the same as the
market demand for the product? - Answer -monopoly
In the long run, the monopolist can earn: - Answer -zero or positive economic profit
Natural monopoly happens when the: - Answer -average total cost curve is decreasing
Which point on this graph corresponds to a natural monopoly serving this market and
breaking even? - Answer -Point A
Which of the following is an effect of a monopoly? - Answer -Monopoly causes a
reduction in consumer surplus
What is the firm's profit when it sells six subscriptions per month? - Answer -$72
A monopolist will maximize profit at the level of output where: - Answer -marginal cost
equals marginal revenue
Which of the following statements regarding natural monopoly is true? - Answer -
Natural monopoly is most likely to occur in markets where fixed costs are large relative
to variable costs.
A patent gives its holder the exclusive right to a product for a period of __________
from the date the patent is filed with the government. - Answer -20 years
Which of the following laws outlawed monopolization? - Answer -The Sherman Act
The monopolist produces an output that is __________ the perfectly competitive
industry would produce. - Answer -less than
Governments deal with natural monopolies by: - Answer -using regulations to protect
consumers
Price discrimination is the practice of: - Answer -Dividing consumers into two or more
groups and charging different prices to each group.
The monopolist charges a price that is __________ the perfectly competitive industry. -
Answer -higher than
Which of the following rights is given to the holder of a patent? - Answer -the exclusive
right to a new product
In which of the following market structures is the firm's demand curve the same as the
market demand for the product? - Answer -monopoly
In the long run, the monopolist can earn: - Answer -zero or positive economic profit
