Reading 19: Monopoly LOS a习题精选

The other barriers to entry are government licensing and legal barriers such as utilities are given the exclusive right to supply electricity in certain areas.

Few sellers are a characteristic, not a barrier, of a price-searcher market where there are high barriers to entry. Other barriers are patents or exclusive rights of production.

A natural monopoly is characterized by a single firm within the industry that has sufficient capacity to meet the entire demand of an industry because at that scale the lowest average total cost is achieved.

An example of an industry with legal barriers is utility firms, which are granted exclusive rights to supply electricity in certain areas.

A monopoly is characterized by one seller, a specific and well-defined product for which there is no good substitutes, and high barriers to entry.

All firms maximize profits where MR = MC. Because of a downward-sloping demand curve and high barriers to entry, monopolists can charge a price higher than MC. Like other price searchers, monopolists take price from the demand curve (at the quantity where MR=MC).

Both remaining statements are false. A monopoly structure is characterized by a well-defined product for which there are no good substitutes. Monopolists want to maximize profits, not price.

All cases except wide distribution of a natural resource facilitate a monopoly. If natural resource ownership is concentrated in one firm a monopoly would result.