Reading 19: Monopoly LOS a习题精选 2010, following, including, controls

honeycfa

LOS a: Describe the characteristics of a monopoly, including factors that allow a monopoly to arise and monopoly price-setting strategies.

Which of the following is least likely a barrier to entry?

A) Price controls.

B) Resource controls.

C) Economies of scale.

---

Often barriers to entry are government licensing and legal barriers.

 

honeycfa

Which of the following situations is least likely to lead to high barriers to entry and monopoly supply?

A) Natural resources are spread among many firms.

B) Economies of scale are present.

C) Governmental licensing and regulations are present.

---

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.

honeycfa

Which of the following most accurately describes the competitive structure that is characterized by a firm that operates with the lowest average total cost and has the capacity to produce all of an industry’s output?

A) Competitive monopoly.

B) Natural monopoly.

C) Oligopoly.

---

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.

honeycfa

Which one of the following is most likely to contribute to the presence of monopoly in an industry?

A) Legal barriers to entry into the industry.

B) Inefficiency attributable to bureaucratic decision-making procedures in the industry.

C) Diseconomies of scale.

---

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

honeycfa

Which of the following most accurately describes a market structure that has one seller of a specific, well-defined product that has no good substitutes?

A) Perfect competition.

B) Monopoly.

C) Oligopoly.

---

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.

honeycfa

Which of the following statements about monopolies is most accurate?

A) A monopolist's optimal production quantity is at the point where marginal revenue equals marginal cost.

B) Monopolists charge the highest possible price.

C) A monopoly structure is characterized by a well-defined product for which there are no good complements.

---

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.

honeycfa

There are four main barriers to entry. Which of the following is least likely a barrier to entry?

A) Patents.

B) Economies of Scale.

C) Allocative Efficiency.

---

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.

honeycfa

Which of the following is NOT a barrier to entry?

A) Few sellers.

B) Economies of scale.

C) Government licensing and legal barriers.

---

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.