1 of25

If government regulations significantly increase the cost of operating within a particular market, one result is that

	new firms are discouraged from entering the market.
	barriers to entry are nullified.
	a perfectly competitive market environment is encouraged.
	new firms are encouraged to enter the market.

Question

2 of25

As a means to differentiate their product a monopolistically competitive firm may:

	Place a recyclable symbol on its packaging
	Increase its advertising
	Offer a money back guarantee
	All of the above

Question

3 of25

If the CEO of Superbigbox Stores inc. is playing prisoners' dilemma then, from his perspective, the gains to be had from cooperation are

	smaller than the rewards from pursuing self-interest.
	larger than the rewards from pursuing self-interest.
	larger than the payoffs that will be received.
	smaller than the payoffs that will be perceived.

Question

4 of25

Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?

	Its price will be too high and its output too large.
	Its price will be too low and its output will be too large.
	Its price will be too high and its output too small.
	Its price will be too low and its output will be too small .

Question

5 of25

The slope of the demand curve for a monopoly firm is:

	Flat; this means the firm must sell either a low quantity or high quantity at exactly the same price.
	The same as the market demand curve, which is downward sloping.
	Horizontal, meaning that the monopolist has little control over quantity produced.
	Curved.

Question

6 of25

Intellectual property rights include all of the following except:

	The right of inventors to produce and sell their products
	Trademarks, patent and trade secret legislation
	Copyright legislation
	Works that are public domain

Question

7 of25

If the firm is producing at a quantity of output where the marginal revenue (MR) exceeds marginal cost (MC), then

	The firm should keep expanding production.
	The firm's perceived demand curve will shift to the left.
	MR>MC, the firm is now earning zero profits.
	each marginal unit adds profits by bringing in less revenue than it cost.

Question

8 of25

Would raising the price for a product create larger decline in quantity demanded for a monopolistic competitor than it would for a monopoly?

	a. No, demand remains constant in imperfectly competitive markets.
	Yes, since there are substitutes consumers will buy from competitors who offer lower prices.
	Yes; but temporarily because price increases only create a short run decline in demand.
	No; a monopolist competitor perceives demand as a price maker.

Question

9 of25

Which of the following represents a difference in the process by which a monopolistic competitor and a monopolist make their respective decisions about price and quantity?

	The monopolist's perceived demand curve is market demand
	The monopolistic competitive firms perceived demand curve is market demand
	The monopolist does not fear entry of new firms into the market
	Both a and c

Question

10 of25

There are two types of imperfectly competitive markets. They are:

	Monopoly and competitive markets
	Monopolistic competition and oligopoly
	Monopoly and oligopoly
	Monopolistic competition and perfect competition

Question

11 of25

A monopolistically competitive firm may earn abnormally high profits in the

	Long run, but after entry occurs the short-term perceived demand curve shifts to the right
	Short run, but after entry occur, the long-term perceived demand curve shifts to the right.
	Short term, but the process of entry will drive those profits to zero in the long run
	Long term, but the process of entry will drive those profits to zero in the short run

Question

12 of25

Through the process of exit, monopolistically competitive firms remaining in the market

	are no longer earning losses as demand will increase due to firms exiting.
	are no longer earning zero economic profits.
	will each have positive economic earnings.
	will each have ongoing negative earnings.

Question

13 of25

Economists have long understood the idea that businesses _____________so that they can raise the prices that they charge and earn higher profits.

	actively compete with each other
	avoid competing with each other
	engage in free market activities
	maximize profit margins for social benefit

Question

14 of25

According to Economists, a __________ occurs when the economies of scale are large relative to the quantity demanded in the market. This occurs in industries where the marginal cost of adding an additional customer is very low, once the fixed costs of the overall system are in place.

	Natural Monopoly
	Monopoly
	Monopolistic competition
	Oligopoly

Question

15 of25

Natural monopolies, such as electric companies, often experience a low marginal cost of adding an additional customer, one the fixed cost of the overall system is in place:

	True
	Fales

Question

16 of25

In the framework of an oligopoly, what strategy can work like a silent form of cooperation?

	Always match other cartel firms price increases but don't match price cuts.
	Always match other cartel firm's price cuts, but don't match price increases.
	Immediately match price increases.
	Predatory pricing.

Question

17 of25

A profit- maximizing monopoly

	Should follow the rule of producing where TR= MR and charging a price along the demand curve
	Should follow the rule of producing where MR > TR
	Should follow the rule of producing where MR=MC
	Setting the price at a level that will maximize its' per unit price

Question

18 of25

One characteristic of a monopoly is the barrier to enter the market. A barrier to entry may include:

	Legal forces
	Technological forces
	Market forces
	All of the above.

Question

19 of25

Operating individually, an oligopolist may seek to gain profits by ___________, and __________________.

	Advertising; cutting prices
	Expanding levels of output; cutting prices
	Engaging in predatory pricing; having a mini- monopoly
	Selling distinctive products; advertising

Question

20 of25

In determining monopoly market power, both _____________________ are the two primary factors to be considered.

	its cost structure and its demand curve
	the size of its customer base and its revenues
	its variable cost curve and its fixed cost structure
	the level of wealth within its market and its demand curve

Question

21 of25

Government ____________regulations specify that inventors will maintain exclusive legal rights to their respective inventions for _____________.

	trade secret; limited time
	unlimited time; copyright
	trademark; unlimited time
	patent; limited time

Question

22 of25

The demand curve faced by the monopolist

	is perfectly elastic.
	is perfectly inelastic.
	slopes downward.
	slopes upward.

Question

23 of25

The XYX Steel slashes prices drastically as an attempt to discourage short run competition, this is a strategy known as:

	price fixing
	predatory pricing
	competition
	collusion

Question

24 of25

To sell one more unit of a good, a monopolist must

	lower the price on the last unit only.
	lower the price on all units.
	raise the price only on the last unit sold.
	raise the prices on all goods.

Question

25 of25

A natural monopoly may arise when:

	there are diseconomies of scale in an industry.
	the government allows unrestricted access to a market.
	there are large economies of scale relative to the market.
	companies band together to form a larger company.