#1
Which of the following is a characteristic of a monopoly?
One seller in the market
ExplanationSingle seller dominates market.
#2
Which market structure is the opposite of a monopoly?
Perfect competition
ExplanationMany sellers, no dominance.
#3
What is the term for a market structure with a few large firms dominating the industry?
Oligopoly
ExplanationIndustry domination by a few.
#4
What is the primary barrier to entry in a monopoly?
High start-up costs or exclusive access to resources
ExplanationCostly entry prevents competition.
#5
In a monopoly, the firm faces a downward-sloping demand curve because:
The firm can set its price
ExplanationFirm has control over pricing.
#6
What is the profit-maximizing output level for a monopolist?
Where marginal cost equals marginal revenue
ExplanationMaximizes profit at MC=MR.
#7
How does a monopoly impact consumer surplus compared to perfect competition?
Decreases consumer surplus
ExplanationConsumer benefit decreases.
#8
How does a monopoly impact innovation in comparison to perfect competition?
Discourages innovation
ExplanationLess incentive for innovation.
#9
What is the term for a situation where a monopolist sells additional units at a lower price?
Price discrimination
ExplanationDifferential pricing strategy.
#10
What is a natural monopoly?
A monopoly that occurs when a single firm can supply the entire market at a lower cost than multiple firms
ExplanationSingle firm cost-efficiently serves market.
#11
How does price discrimination contribute to a monopolist's revenue?
It increases total revenue
ExplanationCharging different prices boosts revenue.
#12
Which regulatory approach is commonly used to address the issues of monopoly power?
Antitrust laws
ExplanationLaws prevent monopolistic abuse.
#13
What is the relationship between a monopoly and economies of scale?
Monopolies may benefit from economies of scale
ExplanationLarge scale may reduce costs.
#14
Why might a monopolist engage in price discrimination?
To capture additional consumer surplus
ExplanationCapturing extra consumer value.
#15
What is the Deadweight Loss associated with a monopoly?
The loss of total surplus due to underproduction
ExplanationEfficiency loss from underproduction.