11 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

12 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

13 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

14 of25

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

	Downward sloping
	Upward sloping
	Vertical, parallel to the y-axis
	Horizontal, parallel to the x-axis

Question

15 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

16 of25

The demand curve facing a monopolistically competitive firm is more elastic than the demand curve of a monopoly because:

	Close substitutes exist in a monopolistically competitive market
	People demand less in a monopolistically competitive market than a monopolistic market
	There are more firms in the monopolistic market
	Life isn't fair

Question

17 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

18 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

19 of25

Which of the following is most likely to be a Monopoly?

	A local auto dealership
	A local water company
	A local retail clothing store
	A local real estate company.

Question

20 of25

A Monopolist can best be described as:

	A firm that is the sole producer of a product in which there are no close substitutes, and high barriers to entry.
	A firm that has high demand for its product within a narrowly defined product class such as brown Grade A Eggs produced in Eagle country, Colorado.
	A large multinational firm, with high barriers to entry that produces a single product within the market.
	A firm that has government support, high barriers to entry and produces a single product in a narrow product class.

Question

21 of25

If all the natural gas producers in the U.S. were controlled by Grand One Corp, they would most likely

	file for a patent to give them exclusive rights to make, use and sell for a limited time only.
	acquire the rights for its investors to produce and sell their product.
	decrease production, increase prices, and realize positive economic profits.
	invest in legal protection to prevent copying its methods of production for commercial use.

Question

22 of25

Which of the following best identifies what the concept of differentiated products is closely related to?

	The degree of innovation
	The degree of monopolistic competition that exits
	The degree of product variety that is available
	The location of competitive firm

Question

23 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

24 of25

A monopolistic competitor should produce up to the quantity here MR = MC because:

	After this point, marginal unit is imperfect
	Each marginal unit is adding to profit by bringing in more revenue than its cost
	Each marginal unit is adding profit by increasing price
	Quantity is maximized.

Question

25 of25

Natural Monopolies may arise when:

	there are substantial economies of scale
	a company has control of scarce resources
	there are high costs to transport products in smaller markets
	All of the above