Question

15.  Which of the following is NOT characteristic of a monopoly?                          a. the product is unique 

15.  Which of the following is NOT characteristic of a monopoly?                

         a. the product is unique                                 c. there is little control over price

         b. difficult to enter or leave the industry.      d. there is a single producer

16. A firm that is a Price Takers is a firm in

        a. imperfect markets.                              c. monopoly markets.                                                 

        b. perfectly competitive markets.           d. Both b and c.

17. If there is no change in demand, the only way a monopolist can increase the number             of units sold is by

       a. increasing the price.     c. decreasing the price.    

       b. decreasing output.        d. collusion

Business   Economics   
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Homework Answers

Answer #1

Ans. 15.  c. there is little control over price

Due to a single seller of the product in the market, the monopoly has the full market power over the price of the product. He can charge a different price of the same product to maximise his profit.

Ans. 16.  b. perfectly competitive

In a perfectly competitive market, every firm is a price taker because the price of the product decided by the market forces of demand and supply and a single firm does not influence the price of the product as there are many buyers and sellers of the same product in the market.

Ans. 17. c. decreasing the price.

A monopolist faces a downward-sloping demand curve for his product. Therefore, if he wants to increase the number of units sold in the market, then he can sell more units by decreasing the price of the product.

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