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ECON 1000 Lecture Notes - Market Power, Natural Monopoly, Perfect Competition

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10 Dec 2018

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ECON 1000 Full Course Notes

ECON 1000 Full Course Notes

Document Summary

Chapter 12: monopoly: that produces a good or service for which no close substitute exists. In which there is one supplier that is protected from competition by a barrier preventing the entry of new firms. If a good has a close substitute, even if it is produced by only one firm, that firm effectively faces competition from the producers of the substitute. A monopoly sells a good that has no close substitutes: barriers to entry: a constraint that protects a firm from potential competitors. Three types of barriers to entry are: Natural: a market in which economies of scale enable one firm to supply the entire market at the lowest possible cost. Ownership: occurs if one firm owns a significant portion of a key resource. Legal: a market in which competition and entry are restricted by the granting of a: public franchise (like the u. s.

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Related Questions

When the demand for a good or service limits the quantity that can be sold to an output at which the firm experiences economies of scale, the ____.

A) firm is a single-price monopoly

B) good that the industry produces has close substitutes

C) firm is a natural monopoly

D) firms are protected from competition by a legal barrier

carminegoldfish488

1. Which characteristic led to Microsoft exercising monopoly power?

A.copyright protection for the Windows operating system

B .no close substitutes

C.economies of scale

D.government franchise

2. The goal of antitrust law is to:

A. prevent monopolies and monopoly power from arising.

B.protect monopolies from the competition.

C. make sure consumers pay high prices.

D. preserve allocative inefficiencies of monopolies.

3. Which of the following is not a characteristic of a monopoly?

A. The market has just one seller.

B.There exist significant barriers to entry.

C. Substitutes for the monopolist's products are available to buyers.

D. No close substitutes exist for the monopolist's products.

4. A constantly declining long-run average cost curve is a characteristic of what type of industrial structure:

A. Monopoly

B. Natural monopoly

C. Oligopoly

D. Perfect competition

5. An industry that has large economies of scale operates most efficiently as a(n):

	A.competitive industry.
	B.monopoly
	C.regulated natural monopoly.
	D.anarchic industry.

When is a market classified as monopolistically competitive?

a) A small number of firms compete.
b) There is a barrier that blocks entry by other firms.
c) Many firms produce the same product.
d) Many firms produce a slightly differentiated product.
e) There is one firm that sells a good or service with no close substitutes.

scarletcricket153