AP Microeconomics: Unit 4 questions with correct answers

5 Characteristics of a Monopoly CORRECT ANSWER 1) Single Seller 2) Unique good with no close substitute 3) "Price Maker" 4) High Barriers to Entry 5) Some "Nonprice" Competition Single Seller (1) CORRECT ANSWER -one firm controls the vast majority of a market -firm=industry "Price Maker" (3) CORRECT ANSWER -firm can manipulate price by changing the quantity produced (ie. shifting supply to the left) High Barriers to Entry (4) CORRECT ANSWER -new firms CANNOT enter market -no immediate competitors -firms can make profit in the long-run Some "Nonprice" Competition (5) CORRECT ANSWER -monopolies still advertise their products in an effort to increase demand Four Origins of Monopolies (Barriers to Entry) CORRECT ANSWER 1) Geography 2) Government 3) Technology or Common Us