Monopoly is defined as:
A) A market structure with many sellers and differentiated products
B) A market structure with only one seller providing a unique product
C) A market with no barriers to entry for new firms
D) A market with equal power shared by many firms
In a monopoly, the firm sets the price by:
A) Accepting the market price
B) Equating supply with demand
C) Determining the price that maximizes profit
D) Using price discrimination
The primary characteristic of a monopoly is:
A) Many firms selling identical products
B) A single firm controlling the market
C) Easy entry of new firms
D) Competition among sellers
Which of the following is a potential negative effect of monopolies?
A) Lower prices for consumers
B) Inefficiency and higher prices
C) Increased consumer choice
D) Greater innovation in the market
In a monopoly, the firm’s demand curve is:
A) Perfectly elastic
B) Downward sloping
C) Vertical
D) Horizontal
The monopolist maximizes profit by producing at the point where:
A) Marginal cost equals average total cost
B) Marginal revenue equals marginal cost
C) Average revenue equals marginal cost
D) Total revenue exceeds total cost
Price discrimination refers to:
A) Charging different prices to different consumers for the same good
B) Selling goods at a lower price to competitors
C) Offering discounts to customers based on income
D) Offering different qualities of goods at various prices
Which of the following is NOT a barrier to entry in a monopoly?
A) High startup costs
B) Exclusive access to a necessary resource
C) Patents or copyrights
D) Low consumer demand
In a monopoly, the price is typically:
A) Equal to marginal cost
B) Below marginal cost
C) Greater than marginal cost
D) Equal to the competitive market price
Which of the following is an example of a natural monopoly?
A) Fast food restaurants
B) Public utilities like water supply
C) Software companies
D) Clothing manufacturers
Monopolists often engage in:
A) Price competition
B) Product differentiation
C) Price fixing
D) Collusion with other firms
A key feature of a natural monopoly is:
A) High fixed costs and low marginal costs
B) The firm must produce a differentiated product
C) The ability to charge whatever price they wish
D) The presence of many firms in the market
The social cost of monopoly can be seen in:
A) Higher output and lower prices
B) Reduced consumer surplus and deadweight loss
C) Lower prices and higher efficiency
D) Increased competition in the market
Monopolies are usually less efficient than competitive markets because:
A) They produce at the lowest cost
B) They restrict output and raise prices
C) They are able to innovate more
D) There is no entry barrier for new firms
In which market structure is there the most product differentiation?
A) Perfect competition
B) Oligopoly
C) Monopoly
D) Monopolistic competition
Which of the following is a result of monopolistic behavior?
A) Increased consumer choice
B) Lower prices
C) Decreased output
D) Efficient allocation of resources
In a monopolistic market, the firm’s price is determined by:
A) The forces of supply and demand
B) The government’s price control policies
C) The monopolist’s cost and revenue curves
D) The level of competition in the market
The marginal revenue curve of a monopoly is:
A) The same as the demand curve
B) Above the demand curve
C) Below the demand curve
D) Horizontal at the level of average total cost
Which of the following is an example of price discrimination?
A) Charging the same price to all customers
B) Offering discounts to early buyers
C) Selling in multiple geographic locations at the same price
D) Giving free products to loyal customers
A monopoly’s ability to set prices can lead to:
A) Lower consumer prices than in a competitive market
B) A reduction in economic efficiency
C) Increased consumer surplus
D) A greater variety of goods and services
A monopolist’s price is determined by:
A) The intersection of supply and demand curves
B) The government’s price regulation
C) The monopolist’s marginal revenue and marginal cost curves
D) The competitive market price
The entry of new firms in a monopoly market is restricted by:
A) Low production costs
B) High barriers to entry
C) High consumer demand
D) Low market share of the monopolist
Which of the following is a feature of a monopoly?
A) Numerous firms in the market
B) Homogeneous products
C) Control over price setting
D) Easy entry and exit
The main disadvantage of monopolies to consumers is:
A) Higher prices
B) Increased choices
C) Increased efficiency
D) Lower output
Which of the following is NOT a characteristic of monopolistic competition?
A) Many firms in the market
B) Homogeneous products
C) Some control over price
D) Ease of entry and exit
A monopolist’s economic profit comes from:
A) The ability to restrict output and charge a higher price
B) The ability to innovate faster than competitors
C) The economies of scale from large production volumes
D) The presence of competition in the market
Which of the following is a potential benefit of monopolies?
A) Greater consumer welfare
B) Increased competition
C) Economies of scale
D) Lower prices for consumers
In a monopoly, the consumer surplus is:
A) Higher than in competitive markets
B) Lower than in competitive markets
C) Equal to the consumer surplus in competitive markets
D) Equal to zero
Which of the following is an example of a monopolist price strategy?
A) Price matching competitors
B) Charging the maximum price consumers are willing to pay
C) Offering lower prices to attract new customers
D) Charging the same price to all customers across all segments
