Multiple Choice Identity the letter of the choice that best completes the statem
ID: 1107011 • Letter: M
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Multiple Choice Identity the letter of the choice that best completes the statement or 1. A fundamental source of monopoly market power arises from a. barriers to entry b. perfectly inelastic demand. availability of "free" natural resources, such as water or air. c. perfectly elastic demand. The defining characteristic of a natural monopoly is a. constant returns to scale over the relevant range of output b. diseconomies of scale over the relevant range of output. c. constant marginal cost over the relevant range of output. d. economies of scale over the relevant range of output. The De Beers diamond monopoly is a classic example of a monopoly that a. b. c. d. d. 2. 3. is government-created. D.as451 arises from the ownership of a key resource. was broken up by the government a long time ago. results in very little advertising of the product that the monopolist produces. 4. Which of the following is an impossible feat for a monopolist to accomplish? a. operate at a point on the upper half of the demand curve b. control the price of its good c. charge a higher price and continue to sell the same quantity d. All of the above are correct. Which of the following statements is true of a monopoly firm? 5. A monopoly firm is a price maker and has a downward-sloping supply curve. a. b. A monopoly firm is a price taker and has no supply curve. c. A monopoly firm is a price maker and has no supply curve A monopoly firm is a price maker and has an upward-sloping supply curve d. For a monopoly, the supply curve is a portion of its a. marginal cost curve. b. average total cost curve. c. marginal revenue curve. d. none of the above; a monopoly does not have a supply curve. The simplest way for a monopoly to arise is for a single firm to 6. 7. decrease production to increase demand for its product. a. jointly make pricing decisions with other firms. decrease its prices without consulting other firms. own a key resource. b. c. d. The fundamental cause of monopoly is a. b. c. d. 8. the zero-profit feature of long-run equilibrium in competitive markets. advertising. barriers to entry. incompetent management in competitive firms.Explanation / Answer
1. a Barriers to entry.
2. d Relevant range of output
3. b Ownership of a key resource.
4. c Charge higher price and sell same quantity.
5.d
6.a
7.d
8.c
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