Question

What are the key reasons a monopoly continues to exist, and how does the monopolist use...

What are the key reasons a monopoly continues to exist, and how does the monopolist use its market power to affect the marketplace?

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : There exist a strong barrier in monopoly market. Due to existing strong barrier new firms can not enter into the monopoly market. For this reason monopoly continuously exist. The monopoly has the market power. Due to market power the monopolist charge the higher market price on limited quantity. As a result, consumers have to pay more for their products. As there is no competitors in the monopoly market, hence the monopolist has no incentive to improve the product quality. Due to existing single seller in the monopoly market the market supply is less than the market demand. Thus, monopolist affect the marketplace by using the market power. For this reason the monopoly market is an inefficient market.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What are the key characteristics of a monopoly? How is it different from a perfectly competitive...
What are the key characteristics of a monopoly? How is it different from a perfectly competitive industry? How is the profit maximizing decision different for a monopolist than a firm in a perfect competition? What are the implications in terms of efficient allocation and use of resources? How can the deadweight loss of a monopoly be measured?
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market...
Compare and contrast the key attributes of perfect competition and monopoly. Give examples of both market structures (be creative). Explain why monopoly is less socially efficient than perfect competition. If monopoly is less socially desirable, why does the government allow monopolies to exist? Explain.
1. How does monopoly arise? Give two reasons and explain one of them. b) State the...
1. How does monopoly arise? Give two reasons and explain one of them. b) State the profit-maximizing conditions under monopoly.
Monopoly Consider a situation where a monopolist faces the following inverse market demand curve p =...
Monopoly Consider a situation where a monopolist faces the following inverse market demand curve p = 132 − 2q and the following cost function T C = 12q + 2q 2 f) How much deadweight loss does the monopolist create? g) What could the government do to regulate the monopolist?
Dayna’s Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C =...
Dayna’s Doorstops, Inc. (DD) is a monopolist in the doorstop industry. Its cost is C = 5 + 10Q + Q2, and the demand function is Q = 260 – 2P. Assume that the monopolist is maximizing its profits. What price should DD set to maximize profit? What output does the firm produce? How much consumer surplus does DD generate? How much producer surplus does DD generate? What is the deadweight loss from monopoly power
How does a monopolist determines its output level? Select one: a. Government decides the output level...
How does a monopolist determines its output level? Select one: a. Government decides the output level when it gives the monopoly a patent. b. By setting MR=MC. c. By setting P=MC. d. Any output is good for monopoly, because it’s profitable in the long run.
At what MR does a monopolist maximize its revenue? How elastic is their demand at that...
At what MR does a monopolist maximize its revenue? How elastic is their demand at that MR?
The government often grant monopoly power to private firms through patents. How does this effect consumers?...
The government often grant monopoly power to private firms through patents. How does this effect consumers? What is the justification for granting this type of monopoly power?
Whether a market is competitive or a monopoly is determined by its degree of market power....
Whether a market is competitive or a monopoly is determined by its degree of market power. In the real world, pure competition and pure monopoly do not exist—the real-world market falls somewhere between the two extremes. Why then do you think we study perfect competition and monopoly? What is the closest you have seen or experienced to pure competition or monopoly? Which do you think is preferable? Why?
Suppose a per unit tax is imposed on a monopolist. a) How does this affect output...
Suppose a per unit tax is imposed on a monopolist. a) How does this affect output price? b) How are profits affected? c) What can you say about the burden of the tax – who bears it?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT