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Questions and Answers
What can the government do about monopolies?
What can the government do about monopolies?
- Ignore monopolies to let the market self-regulate
- Regulate or break up monopolies to promote competition (correct)
- Impose higher taxes on monopolies to reduce their influence
- Provide subsidies to monopolies to encourage growth
Why is MR < P for a monopolist?
Why is MR < P for a monopolist?
- The monopolist operates in a perfectly competitive market
- The monopolist has no control over the market price
- The monopolist faces a perfectly elastic demand curve
- The monopolist faces a downward-sloping demand curve (correct)
How do monopolies affect society’s well-being?
How do monopolies affect society’s well-being?
- They lead to lower prices and higher output only in the short term
- They can lead to higher prices and lower output (correct)
- They have no impact on prices or output in the market
- They always lead to lower prices and higher output
What is price discrimination?
What is price discrimination?
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Why do monopolies arise?
Why do monopolies arise?
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