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A natural monopoly exists when

a. a monopolist produces a product, the main component of which is natural wood.

b. economies of scale are so large that only one firm can survive and achieve low average total cost in the long run.

c. a firm is the exclusive owner of a key resource necessary to produce the firm's product.

d. there are many close substitutes for a firm's product 

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Yusra Anees
Yusra AneesLv10
14 Jan 2021
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Related questions

A natural monopoly occurs when:

a. long-run average cost declines continuously through the range of demand.

b., a firm owns and controls an essential resource for production.

c. long-run average cost rises continuously as output increases.

d. economies of scale are obtained at relatively low output levels. 

1. To maximize profits, a firm should produce output up to the point where

A. marginal revenue equals marginal cost

B. price equals marginal cost

C. the gap between the demand curve and the ATC is the greatest

D. all of the above

E. answers a and b, but not c

2. Which statement is false?

A. a profit maximizing firm will increase production when price exceeds marginal cost

B. the lowest point on a firm's short-run supply curve is at the shut-down point

C. A firm will operate at that ouput where MC equals MR only when it is maximizing profits

D. A profit-maximizing firm will decrease production when marginal cost exceeds price.

3. which statement is true?

A. all monopolies are good

B. All monopolies are bad

C. Most natural monopolies are government regulated or government owned

D. None of these statements is true

4. There are _____ limits to monopoly power

A. no

B. some

C. many

5. Which statement is true?

A. the monopolist's most efficient output is her most profitable output as well

B. the monopolist charges a higher price than the perfect competitor in the long run.

C. all monopolists have control over an essential resource.

D. none is true

6. As a firm grows larger

A. economies of scale set in, then diseconomies of scale.

B. diseconomies of scale set in, then economies of scale.

C. economies of scale and diseconomies of scale set in at the same time.

D. neither economies of scale nor diseconomies of scale set in.

7. A monopolist operates at the minimum point of her ATC curve

A. only in the short run

B. only in the long run

C. in both the short run and the long run

D. in neither the short run nor the long run

8. A natural monopoly

A. has an average cost curve that reaches minimum possible average cost at a low level of output.

B. has a marginal cost curve that is steeply upward slopoing.

C. is usually subject to antitrust suits

D is usually allowed to choose its price so as to maximize profits in the United States.

E. occurs when a single firm can supply the entire market demand for a product at a lower average cost than would be possible if two or more firms supplied the market.

9. For a monopolist, the price of the product

A. always equals the marginal revenue

B. is always less than the marginal revenue

C. exceeds the marginal revenue

D. always equals the marginal cost of the product

10. Monopolies are usually viewed with concern from an economic standpoint since

A. size is ingerently dangerous; the larger ther firm, the more likely it is to squeeze out the "little producer"

B. resources may be allocated in an efficient manner.

C. the government may be put at the mercy of several large producers

D. always equals the marginal cost of the product

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.

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