Question

1. Which of the following is the most likely candidate to be a monopoly?

A. Your local electric company

B. General Electric, a large electronics corporation

C. Wal-Mart

D. Sony, the sole producer of PlayStation

2. DeWine’s is a single-price monopolist and it owns the world’s only red diamond mine. It is protected from competition by ______ barrier to entry.

D. no

A. a legal

B. a scale

C. a natural

D. no

3. According to the textbook, all monopolies, ultimately, are ________.

A. closed

B. natural

C. open

D. simple

4. A ______ monopoly is one where there are substantial economies of scale; a ______ monopoly is one where the firm owns a unique natural resource.

A. an open; an open

B. an open; a natural

C. a natural; an open

D. a natural; a natural

Answer 1

1) Sony, a sole producer of PlayStation

(Most important character of monopoly is that, its single seller market. Since Sony is the single producer, it can act as a monopolist.)

2) natural

( Here Dewine owns scarce resource.Its a natural barrier to entry since its the only red diamond mine in the world.)

3) simple

( lf there is a single seller or vendor in the market, its simple monopoly. The term is often used in the place of monopoly.)

4) An natural ; a natural

( A natural monopoly is characterized by increasing returns at all levels of output ,which proves the existence of economies of scale. Having control over a resource also leads to natural monopoly.)

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