43)Some economists argue that Microsoft became a monopoly in the market for computer software bydeveloping MS-DOS, an operating system used for the first IBM personal computers. The morepeople who used MS-DOS-based programs, the greater the usefulness of a using a computer withan MS-DOS operating system. The explanation for Microsoft's monopoly isA)patents Microsoft obtained when it developed the MS-DOS operating system.B)network externalities.C)the development of new technology that other firms could not copy.D)control of a key resource which, in this case, is the MS-DOS operating system.43)12
44)Which of the following is true for a monopolist?44)45)To be a natural monopoly a firm must45)Figure 14-3Figure 14-3 shows the cost and demand curves for a monopolist. 46)Refer to Figure 14-3. The profit-maximizing output and price for the monopolist are _______ themonopolist earns a profit of ______.-124=$16646)47)Assume a hypothetical case where an industry begins as perfectly competitive and then becomes amonopoly. As a result of this changeA)Price will be higher, output will be lower and the deadweight loss will be eliminated.B)Consumer surplus will be smaller and producer surplus will be greater. There will be a netincrease in economic surplus.C)Price will be higher, consumer surplus will be greater and output will be greater.D)Consumer surplus will be smaller, producer surplus will be greater and there will be areduction in economic efficiency.47)13
Figure 14-5Figure 14-5 shows the cost and demand curves for a monopolist. 48)Refer to Figure 14-5. Assume the firm maximizes its profits. What is the amount of consumersurplus?48)49)Refer to Figure 14-5. What is the amount of consumer surplus if, instead of monopoly, the industrywas organized as a perfectly competitive industry?49)50)Refer to Figure 14-5.If the firm maximizes its profits, the deadweight loss to society due to thismonopoly is equal to the area50)14
Answer KeyTestname: ECON 201 EXAM 3 FALL 201115
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