Question 1

Most firms have

Accepted Answer

Most firms have some degree of monopoly pricing power, but it varies depending on factors such as the level of competition, consumer demand, and barriers to entry. This means that they can set prices higher than their marginal cost, but they may not be able to do so without losing market share to competitors. Hence, only some firms can earn monopoly profits, but not all.

Question 2

Which of the following statements is not correct?

Accepted Answer

The answer of Which of the following statements is not...

Question 3

The George Stigler quote,"...the degree of 'market failure' for the American economy is much smaller than the 'political failure' arising from the imperfections of economic policies ..." illustrates the advantage of which type of public policy toward monopolies?

Accepted Answer

The answer of The George Stigler quote,"...the degree of 'market...

Question 4

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Accepted Answer

The answer of Which of the following strategies is not...

Question 5

Which of the following statements is not correct?

Accepted Answer

The statement that the government should always intervene to improve monopoly inefficiency is not correct. In some cases, government intervention may actually worsen the situation, such as when government regulations increase the cost of production for the monopoly and force them to raise prices even higher. In some cases, allowing the monopoly to continue operating inefficiently may be the best option, while in other cases, alternative solutions like promoting competition may be more effective.

Question 6

Which of the following statements is correct?

Accepted Answer

While some degree of monopoly power may be common among firms, substantial monopoly power is more rare. This is because substantial monopoly power requires significant barriers to entry for potential competitors and the ability to control market prices. Many markets have some degree of competition, even if there is a dominant firm with some monopoly power. Therefore, option A is the correct choice.

Question 7

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?

Accepted Answer

The answer of Which of the following is the preferred...

Quiz 15: Monopoly

Most firms have

Which of the following statements is not correct?

The George Stigler quote,"...the degree of 'market failure' for the American economy is much smaller than the 'political failure' arising from the imperfections of economic policies ..." illustrates the advantage of which type of public policy toward monopolies?

Which of the following strategies is not an effective strategy to reduce monopoly inefficiency?

Which of the following statements is not correct?

Which of the following statements is correct?

Which of the following is the preferred strategy for the government to follow to remedy the inefficient allocation of resources associated with monopolies?