Ch.9 Monopoly Flashcards
What is given to the holder of a patent?
The exclusive right to a new product
What is a patent
Patents are granted to new products or processes in order to provide financial incentive to innovate and invent.
T or false: Patents are not awarded for control over resources
true
Natural monopoly is most likely to occur on markets where
fixed costs are very large. It is better for one firm to supply the entire market
what is the purpose of the Competition Act
it was designed to prevent market monopolization in Canada and to encourage greater competition
The monopolist charges a price that is __________ the perfectly competitive industry.
higher than
The only legal restriction concerning price discrimination is that firms cannot use it to
drive rivals out of business.
A patent gives its holder the exclusive right to a product for a period of __________ from the date the patent is filed with the government.
20 years
T or false: In a monopoly, the firm’s demand curve is not the same as the market demand for the product.
False: In a monopoly, the firm’s demand curve is the same as the market demand for the product.
A monopolistically competitive firm is characterized by the existence of many firms in the market,___________ and ____
differentiated products and low barriers to entry.
Which types of firms use the marginal revenue equals marginal cost approach to maximize profits? MC=MR
Both perfectly competitive and monopolistically competitive
A monopolistically competitive firm in a long-run equilibrium produces where
its demand curve is tangent to its average total cost curve.
This makes zero economic profits, no firms will enter or exit
When consumers buy a product from a monopolistically competitive firm they pay
a price greater than marginal cost but also have a wider array of choices.
The demand curve is the same as marginal revenue for which firms?
for firms in perfectly competitive markets
