Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 10, Problem 6QP
To determine
The condition in which
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What is a monopoly and why does it differ from perfect competition? discuss an example of monopoly, its source of market power, and possible policy solutions to correct the negative consequences stemming from highly concentrated market power.
One difference between a competitive firm and a monopoly is that __________________.
a. monopoly makes economic profits, but a competitive firm never makes economic profits
b. a monopoly faces a downward sloping marginal revenue curve, whereas a competitive firm faces a horizontal marginal revenue curve
c. the cost curves of a monopoly are always below those of a competitive firm
d. a monopoly always has economies of scale, but a competitive firm always has diseconomies of scale
One major advantage of pure competition compared to a monopoly is that:
A. economies of scale become less important.
B. businesses have more incentives to keep prices low.
C. more capital is available for research and development.
D. consumers have to make fewer economic choices.
Chapter 10 Solutions
Microeconomics
Ch. 10.1 - Prob. 1STCh. 10.1 - Prob. 2STCh. 10.1 - Prob. 3STCh. 10.3 - Prob. 1STCh. 10.3 - Prob. 2STCh. 10.3 - Prob. 3STCh. 10.3 - Prob. 4STCh. 10.5 - Prob. 1STCh. 10.5 - Prob. 2STCh. 10.5 - Prob. 3ST
Ch. 10 - Prob. 1QPCh. 10 - Prob. 2QPCh. 10 - Prob. 3QPCh. 10 - Is there a deadweight loss if a firm produces the...Ch. 10 - Prob. 5QPCh. 10 - Prob. 6QPCh. 10 - Prob. 7QPCh. 10 - Prob. 8QPCh. 10 - Prob. 9QPCh. 10 - Prob. 10QPCh. 10 - Prob. 11QPCh. 10 - Prob. 12QPCh. 10 - Prob. 13QPCh. 10 - Prob. 14QPCh. 10 - Prob. 1WNGCh. 10 - Prob. 2WNGCh. 10 - Prob. 3WNGCh. 10 - Prob. 4WNGCh. 10 - Prob. 5WNGCh. 10 - Prob. 6WNG
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Similar questions
- These are statements comparing monopoly with perfect competition. Which of the following statements is/are false? Select all that apply. A. A a perfectly competitive industry faces a horizontal straight line demand curve whereas a monopoly faces a downward sloping demand curve. B. A perfectly competitive firm faces a small fraction of the industry demand curve whereas a monopoly faces the entire market demand curve. C. A perfectly competitive firm can only set quantities; a monopoly can set both price and quantity, although once it chooses a price (quantity), the other variable, quantity (price), is determined by the demand curve it faces. D. A perfectly competitive equilibrium is efficient; a monopoly equilibrium is inefficient. E. A perfectly competitive firm necessarily earns zero economic profit in a long run equilibrium; a monopoly typically earns a super-normal profit in a long run equilibrium.arrow_forwardThe monopoly business is described as a price maker. How does this differ from a perfectly competitive firm which is described as a price taker? Explain fully.arrow_forwardComparing a perfectly competitive market to a monopoly, which of the following is true? a. Price will be higher and quantity will be lower in the perfectly competitive market than in the monopoly. b. Price will be equal to marginal revenue in the perfectly competitive market but will be higher than marginal revenue in the monopoly. c. at that point on the market demand curve which intersects the marginal cost curve. d. Price will be higher than marginal cost in the perfectly competitive market but will be equal to marginal cost in the monopoly.arrow_forward
- Compared to the perfectly competitive industry, a monopoly options: provides a higher quantity. provides exactly the same quantity. charge the same price. provides a lower quantity.arrow_forwardWhich of the following is true in the long run for both perfect competition and monopoly? 1 Firms cannot earn economic profit in the long run. 2 Individual firms have no ability to control the price of their output but must accept the market price. 3 Firms go out of business in the long run if total revenue cannot cover total cost. 4 Firms can earn economic profit in the long run.arrow_forwardIn a perfectly competitive market, one of the following answers is correct with respect to the demand curve for a perfectly competitive firm. Which one? Group of answer choices The perceived demand curve is downward sloping. The perceived demand curve for a perfectly competitive firm and a monopolist look the same. When price increases, quantity demanded from the firm will also decrease. The demand curve is flat. Answer correct and explain within 40 mins will give you positive feedback.arrow_forward
- In the Long Run Monopoly profits O Are likely to be Positive, which is not possible in Perfect Competition O Must be Negative, the same as in Perfect Competition O Must be Zero, the same as in Perfect Competition O Must be Positive, like in Perfect Competition Hand written solutions are strictly prohibitedarrow_forwardAnalyze graphically the difference between monopoly and perfectly competitive marketarrow_forwardIn a perfectly competitive market, one of the following answers is correct with respect to the demand curve for a perfectly competitive firm. Which one? Group of answer choices The perceived demand curve is downward sloping. The perceived demand curve for a perfectly competitive firm and a monopolist look the same. When price increases, quantity demanded from the firm will also decrease. The demand curve is flat.arrow_forward
- Compare and contrast the decision-making processes of a competitive firm versus a monopoly firm. a. The difference between C and M markets in terms of the (homogeneity or uniqueness of product, barriers to enter and number of firms). b. You must point to the difference in the demand curve for a C firm and that for a M firm. c You must refer to the long run profit (or not) of the C as well as M firm. d. You must point to whether C and M firms are efficient or NOT. Graphs are welcome, not manadatory.arrow_forwardIn the long run, where is the market equilibrium in a market supplied by a monopoly? Group of answer choices A. The output & price where the market MC equals the market demand B. The output & price where the market supply equals the market demand C. The output & price where the market MR = the market MC D. The output & price where the industry's MR equals the industry demandarrow_forwardComparing a perfectly competitive market to a monopoly, which of the following is true? Group of answer choices Price will be higher than marginal cost in the perfectly competitive market but will beequal to marginal cost in the monopoly. Price will be equal to marginal revenue in the perfectly competitive market but will behigher than marginal revenue in the monopoly. at that point on the market demand curve which intersects the marginal cost curve. Price will be higher and quantity will be lower in the perfectly competitive market than inthe monopoly.arrow_forward
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