3.4.5

Question 1

What is a pure monopolist?

Answer 1

A single supplier that dominates the entire market

Question 2

The CMA deems a working monopoly is any firm with?

Answer 2

Greater than 25% if industries total sales

Question 3

What does the CMA deem as a dominant form?

Answer 3

A firm that has at least 40% market share

Question 4

What are the characteristics of a monopoly?

Answer 4

-High entry and exit barriers
-Maximise profit
-Price makers have a downward sloping deman curve
-AR is falling MR is below AR

Question 5

What is natural monopoly?

Answer 5

type of monopoly that arises due to unique circumstances where high start-up costs and significant economies of scale lead to only one firm being able to efficiently provide the service in a certain territory.

Question 6

What does a natural monopoly occur?

Answer 6

When a large business can supply a market Royce at a lower price than smaller ones

Question 7

What are the economic case against monopolies?

Answer 7

-Prices are higher than under competitive conditions
-Absence of genuine market competition may lead to production inefficiencies
-Hugh prices limit output in a market lead to fewer economies of scale
-Less drive to innovate
-Cause diseconomies of scale