quiz 6 chapter 6 solutions

quiz 6 chapter 6 solutions - Self-Test Questions Chapter 6...

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Self-Test Questions Chapter 6 MULTIPLE CHOICE 1. To define a monopoly, we cite the following characteristics: (i) The firm is the sole seller of its product. (ii) The firm's product does not have close substitutes. (iii) The firm generates a large economic profit. (iv) The firm is located in a small geographic market. a. (i) and (ii) b. (i) and (iii) c. (ii) and (iv) d. All of the above are correct. ANS: A 2. A fundamental source of monopoly market power arises from a. perfectly elastic demand. b. perfectly inelastic demand. c. barriers to entry. d. availability of "free" natural resources, such as water or air. ANS: C 3. Because monopoly firms do not have to compete with other firms, the outcome in a market with a monopoly is often a. not in the best interest of society. b. one that fails to maximize total economic well-being. c. inefficient. d. All of the above are correct. ANS: D 4. When a natural monopoly exists, it is a. always cost effective for government-owned firms to produce the product. b.
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This note was uploaded on 03/30/2011 for the course ECON 2200 taught by Professor N/a during the Fall '10 term at Algonquin College.

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quiz 6 chapter 6 solutions - Self-Test Questions Chapter 6...

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