Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 12, Problem 1TY
To determine
Pure monopolies.
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Which one of the following is the best description of a monopolist? a.a firm that is the sole producer of a product for which there are no good substitutes in a market with high barriers to entry b.a firm that is the sole producer of a narrowly defined product class, such as yellow, grade-A butter produced in Wisconsin c.a firm that is large relative to its competitors d.a firm that produces a single product
Which of the following in your view , is the BEST example of a NATURAL monopoly . Note some of these may not even be natural monopolies.
a.The production of electricity
b.delivering packages (UPS and similar companies)
c.The monopoly Microsoft holds in the operating system market
d.The delivery of electricity to homes.
explain why you agree or disagree with the following statements:
a. "all monopolies are created by the government"
b "the monopolist charges the highest possible price"
c. "the monopolist never take a loss"
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- Which of the following is likely a monopoly? a.All other answers are correct b. The Beatles (in being able to legally produce Beatles cds) c.A grocery store in a small town that has only 2 stores. It is a snowy and cold day , and the stores are located in opposites sides of the town. Driving to the other side to buy at the other store is then dangerous and uncomfortable. d.Microsoft - in the operating system market Which one ??arrow_forwardWhat are the three reasons that a market might have a monopoly? Give two examples of monopolies and explain the reasons for each.arrow_forwardWhich two kinds of monopolies exist? Which is more economically efficient? Why?arrow_forward
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- Use the graph to answer the following 5 questions. A single priced unregulated monopolist faces the demand curve and has the cost curves illustrated in the diagram below. 1. What is the profit Price maximizing quantity of output? 70 a) 25 units. b) 40 units. c) 50 units. d) 60 units. 60 e) 70 units. f) 80 units g) 90 units Marginal Cost 50 2. What price does this monopolist charge? a) $58 b) $20 40 Average Total Cost c) $35 d) $30 e) $45. f) $50 30 g) $40 h) $38 3. What are the total profits? a) $1200 b) $0 c) $1250 d) $200 e) $250. f) $2250. g) $150 h) $1600 20 10 Demand 20 40 60 80 100 120 140 160 Quantityarrow_forwardQuestions: 1. What type of monopoly is Meralco? Explain your answer.2. What inefficiencies does the over recovery impose on the market?3. Aside from the government directive, what can be done to prevent Meralco from overcharging?arrow_forwardIs the insulin market considered as a monopoly? How and Why?arrow_forward
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