1. a. Which attribute does a firm that is a natural monopoly have? It is very likely to be concerned about new entrants eroding its monopoly power. It is taking advantage of loyal consumers. It would experience lower average total revenue If more firms entered the market. d. It experiences economies of scale. b. C. d. 2. a. a Why are drug companies allowed to be monopolists in the drugs they discover? in order to allow drug companies to charge a price that is equal to their marginal cost In order to discourage new firms from entering the drug market In order to encourage research in order to regulate health and safety concerns b. d. 3. What is the typical market demand curve for a monopolist? upward sloping b. downward sloping horizontal d. vertical a. c a. For profit-maximizing firms in a monopolistically competitive market, what results from gaining another customer? no change in profit b. more profit potential economic losses marginal cost potentially in excess of price C. d