Question

1. A monopoly is best defined as a firm doing which of the following? A. Selling...

1. A monopoly is best defined as a firm doing which of the following?

A. Selling a product for which there are no close substitutes

B. Making short-run economic profits

C. Having a degree of market power

D. Having a downward-sloping demand curve

2.What is assumed to be the monopoly firm’s underlying objective?

A. To charge the highest price possible

B. To produce as little as possible

C. To maximize profits

D. To force competition out of business

3. When we refer to concentration in a market, we are measuring ________.

A. profits

B. sales revenue

C. ownership of capital

D. costs of production

4. Firms can be price searchers in each of the following markets, except for ______________.

A. perfect competition

B. monopoly

C. oligopoly

D. monopolistic competition

Homework Answers

Answer #1

Answer
1 C. Having a degree of market power
The monopoly is a price maker and not a price taker, like in perfect competition.

2 C. To maximize profits
The monopoly tries to earn the maximum profit by charging a price P=MR=MC.

3 C. ownership of capital
It refers to the concentration of capital and the number of players in a market.

4 A. perfect competition
In perfect competition firms search prices to understand what they should charge.

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