Why is there a social cost ofmonopoly?

A.The firm does not equate marginal cost to marginal revenue.

B.The firm produces too much of the good.

C.Too few resources are being used in a monopoly.

D.Too many resources are being used in a monopoly.

An example of a vertical merger is

A.Gibson guitar company purchasing Fender guitar company

B.two competing brokerage firms merging into one

C.a mega grocer purchasing a local grocer

D.a cabinet company purchasing a lumber mill

Inlong-run equilibrium, the perfectly competitive firm makes

A.negative economic profits.

B.positive accounting profits but negative economic profits.

C.positive economic profits.

D.zero economic profits.

If a computer chip maker lowers the price of their good as a reaction to acompetitor, they are likely in what marketstructure?

A.Monopsony

B.Perfect competition

C.Oligopoly

D.Monopoly

Aprofit-maximizing monopolist will continue producing a good until

A.marginal cost equals marginal revenue

B.marginal revenue equals marginal supply

C.marginal cost is equal to market demand

D.average total cost is equal to marginal cost

All of the following are characteristics of a perfectly competitive market EXCEPT

A.barriers to entry

B.buyers and sellers have access to relevant information

C.homogenous products

D.no economic profit

a monopoly is best described as

A.a market where individual buyers and sellers have no effect on price

B.a single supplier of a good or service with many close substitutes

C.a single supplier of a good or service with no close substitute

D.few suppliers of a homogenous good or service

If short run economic profits occur in a perfectly competitive market we would expect

A.Oaxaca-Blinder model to predict unexplained variance

B.For firms to leave the market and economic profits to increase

C.demand for the product to increase

D.For more firms to enter the market until economic profit is zero

If an oligopolist is given a choice that yields$50,000 of economic profit and$10,000 economic profit regardless of their competitors choice

A.we can not determine what the oligopolist will do because we do not have the opponents payoff matrix

B.A dominant strategy exists and they will choose to yield$50,000 of profit

C.the oligopolist will adjust their choice based on the competitors choice

D.the oligopolist will choose$10,000 of economic profit

The government has passed legislation likeanti-trusts laws and the Fair Trade Act to discourage monopolies. Why might monopolies not be beneficial toconsumers?

A.Monopolistic companies can comply with government restrictions and regulations

B.Monopolistic companies can produce goods at a lower cost because of economies of scale

C.Monopolistic companies are price makers and can increase prices higher than a competitive market

D.Monopolistic companies can create jobs

Government restrictions that may cause a barrier of entry include all of the following EXCEPT

A.patents

B.licenses

C.free and open trade

D.tariffs

Use a concentration ratio to calculate the market share of the topthree-firms in electric cars

1 Tesla- $54 billion

2 GM- $12 billion

3 Porsche- $6 billion

4 All other firms- $8 billion

TOTAL INDUSTRY$80 billion

A.72%

B.82.5%

C.40%

D.90%