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No firms will enter this market.
No firms will enter this market.
True
After maximizing profits, what do the firm's costs equal?
After maximizing profits, what do the firm's costs equal?
After maximizing profits, what does the firm's revenue equal?
After maximizing profits, what does the firm's revenue equal?
After maximizing profits, what do the firm's profits equal?
After maximizing profits, what do the firm's profits equal?
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The largest cattle rancher in a given region will be unable to have a __________ when sufficient numbers of smaller cattle ranchers provide sources of competition.
The largest cattle rancher in a given region will be unable to have a __________ when sufficient numbers of smaller cattle ranchers provide sources of competition.
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Which of the following is most unlikely to present a barrier to entry into a market?
Which of the following is most unlikely to present a barrier to entry into a market?
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Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?
Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?
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Government ______________ regulations specify that inventors will maintain exclusive legal rights to their respective inventions for ______________.
Government ______________ regulations specify that inventors will maintain exclusive legal rights to their respective inventions for ______________.
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The US government has registered ___________________ on behalf of business firms to protect a particularly distinct element each has selected for its ability to aid consumers to easily __________________.
The US government has registered ___________________ on behalf of business firms to protect a particularly distinct element each has selected for its ability to aid consumers to easily __________________.
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The form of legal protection intended to prevent reproduction of original works is referred to as ______________ law.
The form of legal protection intended to prevent reproduction of original works is referred to as ______________ law.
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In the business world, a _________________ is recognized as a legally acceptable way for any business to keep knowledge of its particular methods of production from being known by competing firms.
In the business world, a _________________ is recognized as a legally acceptable way for any business to keep knowledge of its particular methods of production from being known by competing firms.
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Intellectual property law is a body of law that includes:
Intellectual property law is a body of law that includes:
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A __________________ exists when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve.
A __________________ exists when the quantity demanded in the market is less than the quantity at the bottom of the long-run average cost curve.
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The use of sharp, temporary price cuts as a form of _________________ would enable traditional US automakers to discourage new competition from smaller electric car manufacturers.
The use of sharp, temporary price cuts as a form of _________________ would enable traditional US automakers to discourage new competition from smaller electric car manufacturers.
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Which of the following is most likely to be a monopoly?
Which of the following is most likely to be a monopoly?
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Which of the following will present the least amount of concern to a firm that has a monopoly over a particular industry?
Which of the following will present the least amount of concern to a firm that has a monopoly over a particular industry?
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A firm that holds a monopoly position in the marketplace is:
A firm that holds a monopoly position in the marketplace is:
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Occasionally, _________________ may lead to pure monopoly; in other market conditions, they may limit competition _________________.
Occasionally, _________________ may lead to pure monopoly; in other market conditions, they may limit competition _________________.
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If the North American newsprint paper market has barriers to entry, then:
If the North American newsprint paper market has barriers to entry, then:
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A natural monopoly occurs when the quantity demanded is ________ the minimum quantity it takes to be at the bottom of the long-run average cost curve.
A natural monopoly occurs when the quantity demanded is ________ the minimum quantity it takes to be at the bottom of the long-run average cost curve.
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By 2007, US market deregulation has proven to be most toxic to the overall health of the US economy in the ________________________.
By 2007, US market deregulation has proven to be most toxic to the overall health of the US economy in the ________________________.
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If it was possible for one company to gain ownership control of all the uranium processing plants in the US, then:
If it was possible for one company to gain ownership control of all the uranium processing plants in the US, then:
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In the United States, a pharmaceutical company's exclusive patent rights last for:
In the United States, a pharmaceutical company's exclusive patent rights last for:
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The US laws dealing with original works of authorship allow the US Copyright Office to enforce protection for all but one of the following. Which one is it?
The US laws dealing with original works of authorship allow the US Copyright Office to enforce protection for all but one of the following. Which one is it?
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Copyright protection legislation provides protection for original works:
Copyright protection legislation provides protection for original works:
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Roughly speaking, patent law covers __________ and __________ law protects an author's original books.
Roughly speaking, patent law covers __________ and __________ law protects an author's original books.
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A monopolist is able to maximize its profits by:
A monopolist is able to maximize its profits by:
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Which one of the following is the most accurate description of a monopolist?
Which one of the following is the most accurate description of a monopolist?
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When a natural monopoly exists in a given industry, the per-unit costs of production will be:
When a natural monopoly exists in a given industry, the per-unit costs of production will be:
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Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?
Following the assumption that firms maximize profits, how will the price and output policy of an unregulated monopolist compare with ideal market efficiency?
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The slope of the demand curve for a monopoly firm is:
The slope of the demand curve for a monopoly firm is:
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For a monopolistic firm, the demand for its product is:
For a monopolistic firm, the demand for its product is:
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The marginal revenue curve for a monopolist ____________________ the market demand curve.
The marginal revenue curve for a monopolist ____________________ the market demand curve.
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For a pure monopoly to exist:
For a pure monopoly to exist:
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If monopolists are able to produce fewer goods and sell them at a higher price than they could under perfect competition, the result will be:
If monopolists are able to produce fewer goods and sell them at a higher price than they could under perfect competition, the result will be:
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The two primary factors determining monopoly market power are the firm's:
The two primary factors determining monopoly market power are the firm's:
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What qualities would ideally suit a monopolistic firm with regard to barriers to entry?
What qualities would ideally suit a monopolistic firm with regard to barriers to entry?
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In the event that Only1Corp. obtains control of all the natural gas producers in the US, it would most likely:
In the event that Only1Corp. obtains control of all the natural gas producers in the US, it would most likely:
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When J.K. Rowling exerts copyright ownership of her literary works, she creates a monopoly by restricting:
When J.K. Rowling exerts copyright ownership of her literary works, she creates a monopoly by restricting:
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Once I'MaPharmaCo. has received confirmation of the registration for its latest drug patent application, it will have created a monopoly for that product by restricting:
Once I'MaPharmaCo. has received confirmation of the registration for its latest drug patent application, it will have created a monopoly for that product by restricting:
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When the demand for a good or service limits the quantity that can be sold to an output at which the firm experiences economies of scale:
When the demand for a good or service limits the quantity that can be sold to an output at which the firm experiences economies of scale:
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When a firm pursues a predatory pricing strategy, it does so:
When a firm pursues a predatory pricing strategy, it does so:
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If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3.90 per unit, it will produce and sell the sixth unit if its marginal cost is:
If a firm holds a pure monopoly in the market and is able to sell 5 units of output at $4.00 per unit and 6 units of output at $3.90 per unit, it will produce and sell the sixth unit if its marginal cost is:
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If a firm holds a pure monopoly in the market and is able to sell 4 units of output at $2.00 per unit and 5 units of output at $1.75 per unit, it will produce and sell the fifth unit if its marginal cost is:
If a firm holds a pure monopoly in the market and is able to sell 4 units of output at $2.00 per unit and 5 units of output at $1.75 per unit, it will produce and sell the fifth unit if its marginal cost is:
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__________________ law implies ownership over an idea or concept or image.
__________________ law implies ownership over an idea or concept or image.
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The typical pattern of costs for a monopoly can be analyzed by using:
The typical pattern of costs for a monopoly can be analyzed by using:
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The typical pattern of costs for a perfectly competitive firm can be analyzed by using:
The typical pattern of costs for a perfectly competitive firm can be analyzed by using:
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Which of the following denotes the typical shape of the monopolist's total cost curve?
Which of the following denotes the typical shape of the monopolist's total cost curve?
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When a monopolist increases sales by one unit:
When a monopolist increases sales by one unit:
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If a monopolist increases quantity by one unit, but sells the increased output at a slightly lower price:
If a monopolist increases quantity by one unit, but sells the increased output at a slightly lower price:
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_____________ and __________________ refer to the quantity and price at a point in time.
_____________ and __________________ refer to the quantity and price at a point in time.
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The demand curve perceived by a perfectly competitive firm:
The demand curve perceived by a perfectly competitive firm:
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The total revenue curve for a monopolist will:
The total revenue curve for a monopolist will:
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The figure below shows the demand curve and the long run average cost curve for an electric company. This market is a natural monopoly because:
The figure below shows the demand curve and the long run average cost curve for an electric company. This market is a natural monopoly because:
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Study Notes
Market Structures and Competition
- A monopoly exists when a single seller dominates a market with high barriers to entry, leading to controlled prices and output levels.
- Barriers to entry can include patent laws, technological advantages, and natural monopolies, while deregulation is less likely to present a barrier.
- Monopolists are price makers, maximizing profits by producing where marginal revenue equals marginal cost and adjusting prices based on demand.
Intellectual Property Rights
- Patents grant inventors exclusive rights to their creations for a limited time, typically 20 years in the U.S.
- Trademarks (around 800,000 registered in the U.S.) protect brand identifiers, helping consumers recognize the source of goods.
- Copyright law protects original works, lasting the creator's life plus 70 years, covering forms of expression like literature and music.
Types of Markets
- Natural monopolies are characterized by lower average costs when produced by a single firm, resulting in minimal output that meets demand.
- Monopolistically competitive markets have many sellers with differentiated products and lower barriers compared to pure monopolies.
Pricing Strategies
- Predatory pricing involves temporarily lowering prices to eliminate competition, which can lead to higher long-term profits.
- The demand curve for monopolistic firms is downward sloping, indicating that price and quantity demanded are inversely related as price changes.
Economic Implications
- Firms in monopoly situations can achieve abnormally high sustained profits by restricting output and raising prices.
- Unregulated monopolists produce less and charge more than would occur in competitive markets, leading to inefficiencies.
- The government may regulate monopolies to improve market competition, especially in sectors like telecommunications and banking, where deregulation has had mixed outcomes.
Cost and Revenue Analysis
- The total cost curve for monopolies rises and steepens as output increases, reflecting increasing marginal costs.
- Revenue curves for monopolists start low, rise as sales increase, and eventually decline, often reflecting the diminishing returns when price cuts are required to increase sales.
Legal Definitions
- Intellectual property laws encompass copyright, patents, and trademarks, which protect the creators' rights over their inventions and works.
- The demand perceived by perfectly competitive firms is horizontal, signifying they are price takers in the market since they cannot influence the price due to numerous competitors.
Graphical Representations
- Profit maximization for monopolist firms can be analyzed through graphical representation, where areas under demand and cost curves represent revenue, total costs, and profits visually.
- Intersections of average cost curves and demand curves determine the output levels of a monopoly, illustrating efficient output in terms of market management.
Real-world Examples
- Local electricity distributors often exemplify monopolistic markets due to high infrastructure costs and regulatory environments preventing new entrants.
- Patent protections and trade secrets create competitive advantages, allowing firms to sustain monopolistic practices in their respective industries.
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Description
This quiz covers key concepts in market structures and competition, including monopolies, barriers to entry, and pricing strategies. It also explores intellectual property rights such as patents, trademarks, and copyrights. Test your understanding of these crucial economic principles.
