A. The price is greater than the marginal cost
B. The price is greater than the average cost
C. Costs are higher than they could be due to a lack of competitive pressure
D. There are external cost
Monopoly
In monopoly when abnormal profits are made ?
A. The price set is greater than the marginal cost
B. The price is less than the average cost
C. The average revenue equals the marginal cost
D. Revenue equals total cost
Barriers to entry do not include ?
A. Patents
B. Internal economies of scale
C. Mobility of resources
D. High investment costs
In monopoly which of the following is true ?
A. There are many buyers and sellers
B. There is one main buyer
C. There is one main seller
D. The actions of one firm do not affect the market price and quantity
A welfare loss occurs in monopoly where ?
A. The price is greater than the marginal cost
B. The price is greater than the marginal benefit
C. The price is greater than the average revenue
D. The price is greater than the marginal revenue
Which of the following is not a barrier to entry in a monopolized market ?
A. A single firm is very large
B. The government gives a single firm the exclusive right to produce some good
C. The costs of production make a single producer more efficient than a large number of productions
D. A key resource is owned by a single firm
When a monopolist produces an additional unit, the marginal revenue generated by that unit must be ?
A. below the price because the price effect outweighs the output effect
B. above the price because the output effect outweighs the price effect
C. above the price because the price effect outweighs the output effect
D. below the price because the output effect outweighs the price effect
Which of the following statements about price and marginal cost in competitive and monopolized markets is true ?
A. In competitive markets, price equals marginal cost, in monopolized markets price exceeds marginal cost.
B. In competitive markets price equals marginal cost, in monopolized markets price equals marginal cost
C. In competitive markets price exceeds marginal cost, in monopolized markets price exceeds marginal cost
D. In competitive markets price exceeds marginal cost in monopolized markets price equals marginal cost
Thomas is a monopolist in the production of your textbook because ?
A. Thomson has a legally protected exclusive right to produce this textbook
B. Thomson owns a key resource in the production of textbooks.
C. Thomson is a natural monopoly,
D. Thomson is a very large company
The inefficiency associated with monopoly is due to ?
A. underproduction of the good
B. the monopoly’s profits
C. the monopoly’s losses
D. overproduction of the good