Question

1. Pure monopoly:

a. has never existed

b. is an economic model

c. is the best option for capitalism

d. is the best option for socialism

2. the prices producers charge to cover the cost of supply may be seen on a:

a. television economic update

b. trade journal

c. index table of interest rates

d. supply curve

3. in a competitive free market (i.e., perfect market) buyers and sellers do not have to:

a. pay for things that others enjoy

b. sell goods cheap

c. feel tax oppression from the government

d. do their own taxes

Answer 1

1. b. is an economic model

This is a situation where there is one seller in the whole industry. These are rare, but are often seen in the energy sectors. Like in many countries the nuclear power sector is monopolised by the government only.

2. d. supply curve

The firms supply curve is the marginal cost curve the firm faces while producing the good and service and delivering it.

3. a. pay for things that others enjoy

in perfect competition, every firm has an indentical cost curve. And no customer or seller has an edge over the other.

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