One of the major characteristics of pure monopoly is A. there are severe barrier
ID: 1113686 • Letter: O
Question
One of the major characteristics of pure monopoly is
A.
there are severe barriers to entering the industry.
B.
the total amount produced by the industry is large.
C.
similar products are made by other industries.
D.
there are only a few firms in the industry.
In interpreting the Sherman Act, the Supreme Court developed the Rule of Reason, which says that a firm may be found guilty of violating the law
A.
only if its share of industry output is unreasonably large.
B.
even if its conduct is reasonable.
C.
only if both its conduct and the structure of the industry are unreasonable.
D.
on the basis of industry structure alone.
E.
only if its conduct is unreasonable.
n 1914 Congress passed the Clayton Act and The Federal Trade Commission Act.
A.
The Clayton Act creates a government agency to investigate business behavior, and the FTC Act forbids mergers.
B.
The Clayton Act outlaws certain specific behavior, and the FTC Act prohibits "unfair methods of competition."
C.
The Clayton Act allows Congress to prohibit misleading advertising, and the FTC investigates tying contracts.
D.
The Clayton Act, like the Sherman Act, is vague, while the FTC Act outlaws very specific behavior.
If a monopolist is at a point on its demand curve such that marginal revenue is
greatergreater
than marginal cost, then it can increase profit by
A.
decreasingdecreasing
price and
increasingincreasing
output.
B.
decreasing both price and output.
C.
increasingincreasing
price and
decreasingdecreasing
output.
D.
increasing both price and output.
The term "rent seeking" refers to
A.
any actions taken to protect positive profits.
B.
an organization of landlords who jointly raise the rents they charge.
C.
efforts to acquire ownership of real estate which will generate rental income.
D.
a coalition of tenants who act together to reduce the rents they pay.
If a monopolist is protected by barriers that prevent other firms from selling the same product, then the monopolist
A.
is still constrained by the demand curve for its product.
B.
can charge any price without fear of losing customers.
C.
can always increase profit by raising its price.
D.
will pass on to its customers any increase in production cost.
When a firm engages in perfect price discrimination,
A.
consumer surplus is zero.
B.
they produce the same output level as a competitive firm.
C.
there is no deadweight loss.
D.
All of the above are true.
In order to maximize its profit, a monopolist
A.
uses the demand curve to choose price but not to choose output.
B.
decides price and output simultaneously.
C.
first decides what price to charge and then decides the output quantity.
D.
uses the demand curve to choose output but not to choose price.
E.
first decides the output quantity and then decides what price to charge.
Explanation / Answer
1.One of the major characteristics of pure monopoly is
A. there are severe barriers to entering the industry.
2.In interpreting the Sherman Act, the Supreme Court developed the Rule of Reason, which says that a firm may be found guilty of violating the law
E. only if its conduct is unreasonable.
3.In 1914 Congress passed the Clayton Act and The Federal Trade Commission Act.
B.The Clayton Act outlaws certain specific behavior, and the FTC Act prohibits "unfair methods of competition."
4.If a monopolist is at a point on its demand curve such that marginal revenue is greater than marginal cost, then it can increase profit by
A.decreasing price and increasing output.
5.The term "rent seeking" refers to
A. any actions taken to protect positive profits.
6.If a monopolist is protected by barriers that prevent other firms from selling the same product, then the monopolist
A. is still constrained by the demand curve for its product.
7.When a firm engages in perfect price discrimination,
D. All of the above are true.
8.In order to maximize its profit, a monopolist
B. decides price and output simultaneously.
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