Question 1

A pure monopoly industry has a 4-firm concentration ratio equal to

Accepted Answer

A pure monopoly means there is only one firm in the industry, thus the concentration ratio would be 1.0 as there is only one firm controlling the entire market.

Question 2

To maximize profits,a competitive firm produces the output level at which

Accepted Answer

In order to maximize profits, a competitive firm needs to produce the level of output at which its marginal cost equals its marginal revenue. This is because at this level of output, the firm is able to sell each additional unit for the same price as it costs to produce that unit. If the firm were to produce more than this level of output, its marginal cost would exceed its marginal revenue, and it would be losing money on each additional unit. If the firm were to produce less than this level of output, its marginal revenue would exceed its marginal cost, and it would be missing out on potential profits. Therefore, the best choice is C - producing at the level of output where marginal cost equals marginal revenue.

Question 3

Which of the following is likely to have the most monopoly power?

Accepted Answer

Your local water company is likely to have the most monopoly power because it often operates as a natural monopoly within a certain geographical area, typically with exclusive rights to supply water services, facing little to no competition.

Question 4

Imperfect competition can best be described as a situation in which

Accepted Answer

The answer of Imperfect competition can best be described as...

Question 5

Concentration ratios are used to measure the

Accepted Answer

Concentration ratios are used to measure the potential monopoly power within an industry by indicating the percentage of market share held by the largest firms within the industry. A higher concentration ratio indicates a greater degree of market power and potential for anti-competitive behavior, such as price-setting and limiting output.

Question 6

The Following Questions Refer to the table below. 
-The 4-firm concentration ratio in this industry is

Accepted Answer

The answer of The Following Questions Refer to the table...

Question 7

Profit equals

Accepted Answer

Profit is defined as the amount of total revenue minus total cost. In order to earn a profit, a company must generate enough revenue to cover its costs and have a positive amount left over.

Question 8

Which of the following would cause an industry's concentration ratio to make it appear less competitive than it really is?

Accepted Answer

If foreign firms export the industry's product to the United States, the concentration ratio will be decreased because these foreign firms are not typically included in the calculation. This would make the industry appear less concentrated and competitive than it really is. The other options listed do not have a direct impact on the concentration ratio.

Question 9

One difference between a competitive seller and a monopolistic seller is that the

Accepted Answer

A monopolistic seller has some degree of price setting ability due to the lack of close substitutes for its product, distinguishing it from a competitive seller who is a price taker in the market.

Question 10

In a competitive market,the single firm

Accepted Answer

In a competitive market, a single firm is a price taker and cannot raise the price of the product because the market determines the price.

Question 11

The Following Questions Refer to the table below. 
-Assume that no firm in this industry accounts for less than 5% of industry sales.What is the largest number of firms that could be in this industry?

Accepted Answer

The answer of The Following Questions Refer to the table...

Question 12

Monopoly refers to

Accepted Answer

Monopoly refers to a single seller of a product for which there are no good substitutes. While a monopoly may also be a large firm or be one of a few firms in an industry, those characteristics alone do not define a monopoly. Likewise, a firm that refuses to lower its price may or may not be a monopoly depending on the level of competition in the market.

Question 13

To maximize profits,a monopolist produces the output level at which

Accepted Answer

A monopolist's profit is maximized at the output level where the marginal cost equals marginal revenue. This is because at any output level where marginal revenue is greater than marginal cost, the monopolist can increase profit by producing more; and at any output level where marginal cost is greater than marginal revenue, the monopolist can increase profit by producing less. Therefore, the output level where marginal cost equals marginal revenue is the one that maximizes the monopolist's profit.

Question 14

Profits and losses in a private enterprise economic system

Accepted Answer

Profits and losses in a private enterprise economic system provide important signals for entrepreneurs to allocate resources in the most productive way. Profits indicate where resources should be expanded, while losses indicate where resources should be contracted. This helps to ensure that resources are allocated efficiently and that the economy as a whole operates in a sustainable manner. The other options do not accurately describe the role of profits and losses in a private enterprise economic system.

Question 15

The Following Questions Refer to the table below. 
-The 6-firm concentration ratio in this industry is

Accepted Answer

The answer of The Following Questions Refer to the table...

Question 16

For a firm,at the output level at which marginal revenue equals marginal cost,

Accepted Answer

At the output level where marginal revenue equals marginal cost, a firm is maximizing its profits. This is a fundamental principle in microeconomics, indicating the most efficient point of production for profit maximization.

Question 17

Suppose the U.S.auto industry sells 1,000 autos per year.Of this,GM sells 400,Ford 300,and Dodge 250.Given this information,the four-firm concentration ratio of the industry must be at least

Accepted Answer

The four-firm concentration ratio is calculated by adding the market shares of the largest four firms in the industry. Here, GM has 40%, Ford 30%, and Dodge 25%. Adding these gives 95%.

Question 18

A major objective of firms in all types of market structures is

Accepted Answer

Profit maximization is a major objective of firms in all types of market structures. Firms aim to earn profits by producing and selling goods and services at a price that is higher than the cost of production. By maximizing profits, firms can sustain their operations, invest in future growth, and generate wealth for their shareholders.

Question 19

The monopoly power of a firm can be measured by the firm's

Accepted Answer

Monopoly power is best measured by a firm's control over the market supply of its product, as this directly impacts its ability to set prices and influence market conditions.

Question 20

A firm's total revenue equals its

Accepted Answer

Total revenue is the amount of money generated by a business from selling its products or services. It is calculated by multiplying the quantity of goods sold by the price at which they were sold. Therefore, option D - Quantity times price - is the correct choice.

Quiz 8: The Economics of Monopoly Power: Can Markets Be Controlled

A pure monopoly industry has a 4-firm concentration ratio equal to

To maximize profits,a competitive firm produces the output level at which

Which of the following is likely to have the most monopoly power?

Imperfect competition can best be described as a situation in which

Concentration ratios are used to measure the

The Following Questions Refer to the table below. -The 4-firm concentration ratio in this industry is

Profit equals

Which of the following would cause an industry's concentration ratio to make it appear less competitive than it really is?

One difference between a competitive seller and a monopolistic seller is that the

In a competitive market,the single firm

The Following Questions Refer to the table below. -Assume that no firm in this industry accounts for less than 5% of industry sales.What is the largest number of firms that could be in this industry?

Monopoly refers to

To maximize profits,a monopolist produces the output level at which

Profits and losses in a private enterprise economic system

The Following Questions Refer to the table below. -The 6-firm concentration ratio in this industry is

For a firm,at the output level at which marginal revenue equals marginal cost,

Suppose the U.S.auto industry sells 1,000 autos per year.Of this,GM sells 400,Ford 300,and Dodge 250.Given this information,the four-firm concentration ratio of the industry must be at least

A major objective of firms in all types of market structures is

The monopoly power of a firm can be measured by the firm's

A firm's total revenue equals its