ECON 1050 Chapter Notes - Chapter 13: Economic Rent, Economic Surplus, Social Cost

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bluelion986

5 Dec 2017

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Econ chapter 13 notes and terms monopoly. A monopoly is a market with a single firm that produces a good or service with no close substitutes and that is protected by a barrier that prevents other firms from entering the market. Monopolies arise for two reasons: there are no close substitutes, and there is a barrier to entry. Public franchise: an exclusive right granted to a firm to supply a good or service (canada post). Government license: controls entry into particular occupations, professions and industries. Licensing: does not always create a monopoly, but it does restrict competition. Patent: an exclusive right granted to the inventor of a product or service. Copyright: an exclusive right granted to the author or composer or artistic work. *patents and copyrights are valid for a limited time period. Patents encourage the invention of new products and production methods, and they also stimulate innovation. Monopolies set their own prices using two price strategies:

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

Question 1:

Discuss various types of barriers that work in favor of a monopoly (legal barrier, a technological barrier, ownership of a key resource, natural monopoly, scale economy)

Question 2:

Assume Hershey, Pennsylvania's only employer is Hershey Chocolate company which means it is a monopsony (single buyer) in the local labor market. Also assume, all workers belong to one trade union implying the monopoly (one seller) in the labor market. Discuss the equilibrium wage and number of workers hired in this scenario relative to the competitive labor market equilibrium scenario.

turquoisetrout190

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.

goldcattle908

ECON 1050 Chapter Notes - Chapter 13: Economic Rent, Economic Surplus, Social Cost

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