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Economics 1021A/B Lecture Notes - Marginal Cost, Deadweight Loss, Marginal Revenue

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24 Apr 2012

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Western University

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Economics 1021A/B

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ECON 1021A/B Full Course Notes

ECON 1021A/B Full Course Notes

Document Summary

A monopoly is a market with a single firm that produces a good or service for which no close substitutes exist and that is protected by a barrier that prevents other firms from selling that good or service. No close substitute: a monopoly sells a good or service that has no good substitute. Tap water for washing a car or having a shower. Barrier to entry: a constraint that protects a firm from potential competitors is called a barrier to entry, types: Natural monopoly: an industry in which economies of scale enable one firm to supply the entire market at the lowest possible price: the firms that deliver gas, water, and electricity to our homes. Economies of scale prevail over the entire length of the. One firm can supply the entire market at a lower cost than two or more firms can. An ownership barrier to entry occurs if one firm owns a significant portion of a key resource.

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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

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One major barrier to entry under pure monopoly arises from:

A. The availability of close substitutes for a product

B.Ownership of essential resources

C. The price taking ability of the firm

D. Diseconomies of scale

fuchsiahound634

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.