#1
Which of the following is a characteristic of monopoly pricing?
Single seller
ExplanationMonopoly pricing involves a single seller controlling the market.
#2
What is the main reason behind a monopoly's ability to set prices?
High barriers to entry
ExplanationMonopolies can set prices due to significant barriers preventing competition.
#3
Which of the following is NOT a barrier to entry for a monopoly?
Perfect information
ExplanationPerfect information does not act as a barrier to entry for a monopoly.
#4
In monopoly pricing, what is the relationship between price and marginal revenue?
Price is less than marginal revenue
ExplanationIn monopoly pricing, price is typically lower than marginal revenue.
#5
Which of the following is a characteristic of a monopolistic market structure?
Product differentiation
ExplanationMonopolistic market structures feature product differentiation.
#6
In monopoly pricing, the demand curve is:
Downward sloping
ExplanationThe demand curve in monopoly pricing typically slopes downward.
#7
Which of the following is NOT a method of monopoly pricing?
Marginal revenue pricing
ExplanationMarginal revenue pricing is not a method commonly associated with monopoly pricing.
#8
What is the relationship between marginal revenue and price in monopoly pricing?
Marginal revenue is less than price
ExplanationIn monopoly pricing, marginal revenue tends to be lower than the price.
#9
Which of the following is a characteristic of monopolistic competition?
Product differentiation
ExplanationMonopolistic competition involves products being differentiated from each other.
#10
What is the profit-maximizing rule for a monopolist in terms of marginal cost and marginal revenue?
MC < MR
ExplanationA monopolist maximizes profit when marginal cost is less than marginal revenue.
#11
Which of the following is a potential consequence of monopoly power?
Deadweight loss
ExplanationMonopoly power can lead to deadweight loss in the market.
#12
Which of the following statements is true regarding monopoly pricing and economic efficiency?
Monopoly pricing results in neither allocative nor productive efficiency
ExplanationMonopoly pricing does not result in allocative or productive efficiency.
#13
What is the relationship between price and quantity sold in a monopolistic market compared to perfect competition?
Higher price, lower quantity
ExplanationMonopolistic markets tend to have higher prices and lower quantities compared to perfect competition.
#14
Which pricing strategy involves setting the price low initially to capture market share and then raising it later?
Price skimming
ExplanationPrice skimming involves initially setting a low price to capture market share, then raising it.
#15
What is the main goal of a monopolist engaging in price discrimination?
To increase total revenue
ExplanationThe main goal of price discrimination for a monopolist is to boost total revenue.
#16
Which of the following is a type of price discrimination?
Third-degree price discrimination
ExplanationThird-degree price discrimination involves charging different prices to different consumer groups.