Chapter 22

Question 1

Which statement is false?

Answer 1

There are no monopolies in the United States

Question 2

Which statement is false?

Answer 2

The monopolist produces at the minimum point of her ATC curve

Question 3

Which statement is true

Answer 3

A monopoly is a firm that produces all the output in an industry

Question 4

The monopolist produces

Answer 4

where MC = MR

Question 5

Which statement is true?

Answer 5

The monopolist will not lose money in the long run

Question 6

The most efficient output is found

Answer 6

at the bottom of the ATC curve

Question 7

An example of government ownership of a monopoly would be

Answer 7

the Tennessee Valley Authority

Question 8

Which statement is true?

Answer 8

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

Question 9

Which statement is true?

Answer 9

All monopolies are very large firms. Most monopolists do not produce at an output in which MC = MR. The monopolist’s demand curve and MR curve are identical. * None is true*

Question 10

A monopolist operates at the minimum point of her ATC curve

Answer 10

in neither the short run nor the long run

Question 11

If the government attempts to break up a natural monopoly to enforce competition in an industry

Answer 11

the average cost of producing the good will increase

Question 12

In the United States, natural monopolies

Answer 12

are commonly regulated by governments.

Question 13

Patents function to

Answer 13

temporarily protect monopoly power

Question 14

Monopoly firms are

Answer 14

sometimes very large

Question 15

A public utility would be an example of

Answer 15

a natural monopoly

Question 16

Monopoly profit

Answer 16

equals (price - ATC) times quantity sold

Question 17

When an industry is a natural monopoly

Answer 17

the economies of scale in it are very great.

Question 18

The perfect competitor ______ produces at the output at which MC = MR; the monopolist ____ produces at the output at which MC = MR

Answer 18

Always; Always

Question 19

Which statement is true?

Answer 19

All monopolists are imperfect competitors

Question 20

Which one of the following companies is NOT a natural monopoly?

Answer 20

The International Nickel Company

Question 21

A monopolist makes a profit

Answer 21

in both short run and long run

Question 22

Which statement is true?

Answer 22

A monopolist can lose money

Question 23

Each of the following is a legal barrier to entry into an industry except

Answer 23

brand names

Question 24

Which statement is true?

Answer 24

One basis for monopoly is control over an essential resource

Question 25

Which statement is true?

Answer 25

Monopolies tend to be inefficient.