micro11q - Micro Chapter 11 Study Guide Questions Multiple...

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Micro Chapter 11 Study Guide Questions Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A monopoly is best defined as a. a single seller of a product that has characteristics very similar to the products produced in other industries. b. a single seller of a well-defined product for which there are no good substitutes operating in a market with high barriers to entry. c. a market in which a small number of rival sellers produce the entire market output. d. any firm operating in a contestable market. ____ 2. Which of the following firms best fits the definition of a monopoly? a. McDonald's, because it is the only firm who produces the Big Mac b. a local cable company who has been granted the only license to sell cable in a city by the town council c. Ford Motor Company, because there are significant economies of scale in the production of automobiles d. Harvard University, because it has a reputation as being one of the top universities in the country ____ 3. Which of the following is not a barrier that limits the entry of potential competitors into a market? a. government licensing b. control over an essential resource c. an elastic demand for a product d. patent rights ____ 4. When significant economies of scale are present in the production process, an industry will tend naturally toward monopoly because a. one firm will be able to produce the entire market output at a lower cost than several smaller firms. b. marginal revenue will be less than market price, giving firms the incentive to equate marginal cost with price instead of equating marginal cost and marginal revenue. c. economies of scale can only be present when firms produce identical products, and there is no reason to have more than one firm producing the same exact product. d. consumers will be unwilling to compare the prices charged by several different firms.
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This note was uploaded on 04/13/2008 for the course ECO 2023 taught by Professor Mccaleb during the Spring '08 term at FSU.

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micro11q - Micro Chapter 11 Study Guide Questions Multiple...

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