CHAPTER 15 - Chapter15 Monopoly 1. Monopoliesuse their...

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Monopoly 1. Monopolies use their market leverage to a. charge prices that equal minimum  average total cost. b. attain normal profits in the long run. c. restrict output  and  increase price. d. dump  excess supplies of their product  on the market. ANSWER: c restrict output  and  increase price. SECTION: 1 OBJECTIVE: 1 2. If government  officials break a natural monopoly up  into several smaller firms, then a. competition  will force firms to attain economic profits rather than accounting  profits. b. competition  will force firms to produce surplus  output, which drives up  price. c. the average costs of production  will increase. d. the average costs of production  will decrease. ANSWER: c the average costs of production  will increase. SECTION: 1 OBJECTIVE: 1 3. Sizable economic profits can persist over time under  monopoly if the monopolist a. produces that output  where average total cost is at a maximum. b. is protected  by barriers to entry. c. operates as a price taker rather than a price maker. d. realizes revenues that exceed variable costs. ANSWER: b is protected  by barriers to entry. SECTION: 1 OBJECTIVE: 1 4. Most markets are not monopolies in the real world  because a. firms usually face downward- sloping demand  curves. b. supply  curves slope upward. c. price is usually set equal to marginal cost by firms. d. there are reasonable substitutes for most goods. ANSWER: d there are reasonable substitutes for most goods. SECTION: 1 OBJECTIVE: 1 5. Patents grant a. permanent  monopoly  status to creators of scientific inventions. b. permanent  monopoly  status to creators of any intellectual property. c. temporary  monopoly status to creators of scientific inventions. d. temporary  monopoly status to creators of any intellectual property. ANSWER: c temporary  monopoly status to creators of scientific inventions. SECTION: 1
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CHAPTER 15 - Chapter15 Monopoly 1. Monopoliesuse their...

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