Monopoly and Price Discrimination
MULTIPLE CHOICE. Choose the one alternative that best completes the statement
or answers the question.
1)
A market served by only one firm is called a:
1)
_______
A)
perfectly competitive market.
B)
monopoly.
C)
oligopoly.
D)
Any of the above could be correct.
2)
Which of the following is not a characteristic of a monopoly?
2)
_______
A)
There is only one seller.
B)
A monopolist is a price-taker.
C)
There exist barriers to entry.
D)
A monopolist's sales revenue is constrained by the market demand.
3)
Which of the following is not a barrier to entry?
3)
_______
A)
1
,a patent
B)
government licensing
C)
large economies of scale
D)
a large number of existing firms in a market
4)
When economists say a market has "barriers to entry" they refer to:
4)
_______
A)
monopolists being prohibited from selling their products to certain customers.
B)
a policy that some countries establish to reduce imports from other countries.
C)
factors that prevent other firms from challenging a firm with market power.
D)
economic profits that are positive, but too high to encourage entry.
5)
Which of the following is an example of a barrier to entry?
5)
_______
A)
A firm is open for business only at certain hours of the day, and has its doors locked at
other times.
B)
The government grants licenses to taxicab drivers, without which it is illegal to operate a
taxicab.
C)
A newspaper sells advertising space to businesses.
D)
Taking some risk is a necessity when starting a new business.
2
, 6)
Which of the following is not an artificial barrier to entry?
6)
_______
A)
a patent
B)
government franchise
C)
large economies of scale
D)
government licensing
7)
The demand curve that a monopolist faces is:
7)
_______
A)
the market demand curve.
B)
the same as the demand curve that faces a perfectly competitive firm.
C)
not affected by changes in the prices of other goods.
D)
generally flatter than the demand curve that faces a perfectly competitive firm.
Table 13.1
8)
3
MULTIPLE CHOICE. Choose the one alternative that best completes the statement
or answers the question.
1)
A market served by only one firm is called a:
1)
_______
A)
perfectly competitive market.
B)
monopoly.
C)
oligopoly.
D)
Any of the above could be correct.
2)
Which of the following is not a characteristic of a monopoly?
2)
_______
A)
There is only one seller.
B)
A monopolist is a price-taker.
C)
There exist barriers to entry.
D)
A monopolist's sales revenue is constrained by the market demand.
3)
Which of the following is not a barrier to entry?
3)
_______
A)
1
,a patent
B)
government licensing
C)
large economies of scale
D)
a large number of existing firms in a market
4)
When economists say a market has "barriers to entry" they refer to:
4)
_______
A)
monopolists being prohibited from selling their products to certain customers.
B)
a policy that some countries establish to reduce imports from other countries.
C)
factors that prevent other firms from challenging a firm with market power.
D)
economic profits that are positive, but too high to encourage entry.
5)
Which of the following is an example of a barrier to entry?
5)
_______
A)
A firm is open for business only at certain hours of the day, and has its doors locked at
other times.
B)
The government grants licenses to taxicab drivers, without which it is illegal to operate a
taxicab.
C)
A newspaper sells advertising space to businesses.
D)
Taking some risk is a necessity when starting a new business.
2
, 6)
Which of the following is not an artificial barrier to entry?
6)
_______
A)
a patent
B)
government franchise
C)
large economies of scale
D)
government licensing
7)
The demand curve that a monopolist faces is:
7)
_______
A)
the market demand curve.
B)
the same as the demand curve that faces a perfectly competitive firm.
C)
not affected by changes in the prices of other goods.
D)
generally flatter than the demand curve that faces a perfectly competitive firm.
Table 13.1
8)
3
