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Chapter 24 Review .doc

Chapter 24 Review .doc - Review Chapter 24 1 Which of the...

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Review -- Chapter 24: _____________________ ________________ 1. Which of the following is an assumption of the theory of monopoly? 2. The theory of monopoly assumes that the monopoly firm 3. Firm X is a single seller of good X. There are, however, two substitutes for good X. Given this, 4. Suppose Firm X is a monopolist and is receiving positive economic profits. What prevents other firms from directly competing away the profits? 5. Which of the following is an example of a legal barrier to entry? 6. A public franchise is a right granted 7. A natural monopoly exists when 8. Which of the following is the best example of a monopoly? 9. Which of the following is the best example of a barrier to entry into a monopolistic industry? 10. Public franchises, patents, and government licenses are examples of __________ barriers to entry. 11. A right granted to a firm by government that permits the firm to provide a particular good or service and excludes others from doing the same is called 12. Which of the following is not an example of a legal barrier to entry? 13. Which of the following is not an example of a legal barrier to entry? 14. If economies of scale are so pronounced in an industry that only one firm can survive in the industry, this firm is called a(n) __________ monopoly. 15. A monopoly may exist because 16. A seller that has the ability to control the price of the product to it sells to some degree is called a price 17. In the United States, patents are granted to inventors of a product or process for a period of 18. A price searcher
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Review -- Chapter 24: _____________________ ________________ 19. false : 20. A price searcher is: 21. False statements: 22. For the monopoly firm that does not engage in perfect price discrimination, 23. false : 24. true: 25. false : 26. In maximizing profits, a single-price monopolist will charge a price that is 27. If a monopolist wishes to sell an additional unit of the good, then 28. Maximizing total revenue turns out to be the same as maximizing profit only when 29. A monopolist can sell 10,000 units at a price of $5 per unit. Lowering price to all buyers by $1 raises the quantity demanded by 1,000 units. What is the change in total revenue resulting from this price change? 30. A monopolist can sell 16,000 units at a price of $100 per unit. Lowering price by $1 raises the quantity demanded by 500 units. What is the change in total revenue resulting from this price change? 31. A monopolist maximizes profits at the output at which 32. Which of the following is characteristic of the monopoly firm? 33. Which of the following statements is true?
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Review -- Chapter 24: _____________________ ________________ 34. In order for a monopolist to be earning a profit, price must be greater than 35. In a monopolistic market structure, if price is above average total cost, the monopolist is 36. The Townshend Acts 37. The perfectly competitive firm charges a price equal to __________ while the monopolist charges a price __________.
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