#1
In economics, what is a monopoly?
A market with one seller and many buyers
ExplanationSingle seller dominates, multiple buyers.
#2
What is market power?
The ability of a firm to control the price and output in a market
ExplanationFirm's control over price and output.
#3
What is a characteristic of a natural monopoly?
One firm producing a unique good with high barriers to entry
ExplanationSingle firm, unique good, entry barriers.
#4
Which of the following is a strategy for a monopolist to maintain market power?
Engaging in price discrimination
ExplanationMonopolist's strategy: price discrimination.
#5
What is price discrimination in economics?
When a firm charges different prices to different customers for the same good or service
ExplanationCharging different prices to different customers.
#6
Which of the following is NOT a characteristic of monopolistic competition?
Barriers to entry
ExplanationMonopolistic competition lacks entry barriers.
#7
What is the main difference between a monopoly and perfect competition?
Number of firms in the market
ExplanationDiffer in the number of firms.
#8
What is a cartel in economics?
An agreement between firms to restrict competition
ExplanationFirms' agreement to restrict competition.
#9
What is the concept of 'deadweight loss' in a monopoly?
The loss in consumer surplus due to higher prices and reduced output
ExplanationDeadweight loss: Consumer surplus reduction in monopoly.
#10
What is a potential disadvantage of monopolies for consumers?
Decreased innovation and product variety
ExplanationMonopolies can reduce innovation and variety.
#11
What is a barrier to entry in a monopoly?
Factors that make it difficult for new firms to enter the market
ExplanationFactors hindering new firms' market entry.
#12
What is a natural monopoly?
A monopoly that arises due to the unique characteristics of the market
ExplanationMonopoly due to unique market characteristics.
#13
How does a monopoly affect resource allocation in the economy?
It may result in an inefficient allocation of resources
ExplanationMonopoly may lead to inefficient resource allocation.
#14
Which of the following is NOT a characteristic of a monopoly?
There is significant competition from other firms
ExplanationMonopoly lacks significant competition.
#15
What is the goal of antitrust laws in relation to monopolies?
To prevent or regulate monopolistic behavior
ExplanationAntitrust laws aim to prevent or regulate monopoly behavior.
#16
Which of the following is a real-life example of a natural monopoly?
A utility company providing electricity
ExplanationUtility company providing electricity is a natural monopoly.