Which of the following is NOT a source of monopoly power? Sole ownership of a natural resource Legal limits on competition Competing firms which produce similar products Decreasing long run average costs as output increasesWhich of the following can cause a natural monopoly? Select all that apply. Control of a physical resource Economies of scale Laws prohibiting competition Difficult transportation needsWhich of the following is an example of predatory pricing? Charging high prices to increase prots Temporarily dropping prices to undercut new competition Charging prices slightly higher than competitors' prices Charging low prices in the long run to keep competition low Which of the following is necessary for a monopoly to exist? Abnormally high profits in the industry A small number of firms in the industry High barriers to entry Legal protection against competitionThe US. Postal Service is an example of a . Select all that apply. True monopoly Legal monopoly Oligopoly Cartel ' monopoly determines what price to charge based on Its average cost curve Its demand curve Its marginal cost curve If a monopoly is maximizing prot, which of the following must be true? The monopoly must be operating above the breakeven point The monopoly must be operating above the shutdown point Its price will be greater than marginal cost Its price will be less than marginal cost Which of the following statements is NOT true? Unlike perfectly competitive firms, a monopoly's marginal revenue curve is below its demand curve Like perfectly competitive firms, a monopoly maximizes profits at the level of output where marginal revenue = marginal cost Unlike perfectly competitive firms, a monopoly always earns positive economic profits Like perfectly competitive firms, a monopoly has a U-shaped short run average cost curveWhich of the following are purposes of antitrust and similar regulatory action? Select all that apply. Block all mergers and acquisitions Reduce anticompetitive behavior by firms Enforce rules against restrictive practices Prevent all monopoliesIf natural monopolies want to earn an economic profit, they charge a price That is equal to marginal cost That is productively and allocationy efficient Above the average cost curve Below the average cost of productionMarket failure can occur when there is a lack of . (select all that apply) Private property rights Institutions Social norms Enforceable contracts A positive externality occurs when The marginal social cost of some action exceeds the marginal private cost The marginal private cost of some action exceeds the marginal social cost The marginal social benefit of some action exceeds the marginal private benefit The marginal private benefit of some action exceeds the marginal social benefitThe existence of positive externalities in a market leads to Too much production of the product Just enough production of the product Not enough production of the product The price exceeding the marginal cost of the product Select the statement(s) that are challenges associated with command-and control regulation. (select all that apply) It has not been highly successful in protecting and cleaning up the US. environment It offers no incentive to improve the quality of the environment beyond the standard set by a particular law It is inexible It is subject to compromises in the political process A pollution charge is a kind of imposed on the quantity of pollution that a rm emits. Price control Pigouvian tax Marketable permit Money-back guarantee are the legal rights of ownership on which others are not allowed to infringe without paying compensation. Common-pool resources Property rights Occupational licenses Marketable permits A public good is nonexcludable, meaning that It is costly or impossible to bar someone from using the good Use by one person does not reduce availability to others Use by one person reduces availability to others People can be barred from having access Private goods are not subject to the free-rider problem, because A consumer must pay to get them A producer must incur costs to produce them They are rival, unlike public goods People can be barred from having access Solutions to market failure fall on a continuum between government, markets, and civil society. Capandtrade is A government and civil society solution A market and civil society solution A government and market solution is when one party knows something relevant to a transaction, but the other party does not. A moral hazard Collateral An incomplete contract Asymmetric information
