Economics > EXAM REVIEW > Homework 8_Monopoly (All)

Homework 8_Monopoly

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A monopolist Select one: a. Faces the entry of many new firms in the market b. produces a product with no close substitutes. Correct. A monopoly is the sole producer of a unique product protected ... by barriers to entry. c. experiences diseconomies of scale. d. uses extensive advertising. Feedback The correct answer is: produces a product with no close substitutes. Question 2 Correct 1.00 points out of 1.00 Flag question Question text If market share for five cleaning service companies are 8%, 13%, 6%, 25%, and 48%, the four firm concentration ratio would be ________. Select one: a. 49 b. 100 c. 94 Correct. The four firm concentration ratio would add up the market share of the 4 largest firms:48+25+13+8% d. 27 Feedback The correct answer is: 94 Question 3 Correct 1.00 points out of 1.00 Flag question Question text If market share for six cleaning service companies are 8%, 10%, 6%, 3%, 25%, and 48%, what would be the Herfindahl-Herschman (HHI) index calculation? Select one: a. 5008 b. 523 c. 3138 Correct. The Herfindahl-Herschman (HHI) index is the sum of the square of market shares: (8^2)+(10^2)+(6^2)+(25^2)+(48^2)+(3^2) d. 52 Feedback The correct answer is: 3138 Question 4 Correct 1.00 points out of 1.00 Flag question Question text If you were to compare an ideal market efficiency with an unregulated monopolist. Assuming that firms maximize profits, how will the monopoly price and output policy compare? Select one: a. The price will be too low and output too small. b. The price will be too high and output too large. c. The price will be too low and output too large. d. The price will be too high and output too small. Correct. Monopolies tend to charge a higher price than competitive firms and produce less as well. Feedback The correct answer is: The price will be too high and output too small. Question 5 Correct 1.00 points out of 1.00 Flag question Question text Of the following examples, which has the potential to lead to domination in an industry by a monopoly? Select one: a. sole ownership of a natural resource Correct. If one firm has the control over a natural resource because it owns the land where it is produced or the mining rights, such as nickel or cobalt, it can dominate the market and become a monopoly. b. international regulations c. low barriers to entry into the market d. rapid technology innovation Feedback The correct answer is: sole ownership of a natural resource Question 6 Correct 1.00 points out of 1.00 Flag question Question text Profits for a monopoly will be highest at the point where Select one: a. total cost is most above total revenue. b. total costs are most above the demand curve. c. Price is higher than total cost d. total revenue is most above total cost. Correct. Profit is maximized when the difference between revenue and cost is the largest with revenue higher than cost. Feedback The correct answer is: total revenue is most above total cost. [Show More]

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