When comparing a monopoly to a perfectly competitive industry at the equilibrium point,we find that monopoly is:inefficient because it generates less output.is neither efficient nor inefficient.inefficient because it charges lower prices.O efficient because it generate more output due to economies of scale.

Perfect competition, according to economic theory, occurs when all companies sell identical items,…

When comparing a monopoly to a perfectly competitive industry at the equilibrium point, we find that monopoly is: inefficient because it generates less output. O is neither efficient nor inefficient. inefficient because it charges lower prices. efficient because it generate more output due to economies of scale.

When comparing a monopoly to a perfectly competitive industry at the equilibrium point, we find that monopoly is: inefficient because it generates less output. O is neither efficient nor inefficient. inefficient because it charges lower prices. efficient because it generate more output due to economies of scale.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter8: Monopoly

Section: Chapter Questions

Problem 1SQP

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Similar questions

In order to allow a natural monopoly to continue operations in the long run, the regulated price must be at least as high as the * O average total cost where the average total cost curve meets the demand curve. O marginal cost where the marginal cost curve meets the demand curve. O minimum point of the average total cost curve. O minimum point of the average variable cost curve. O minimum point of the marginal cost curve.
Sacramento Gas and Electric is a firm that represents a natural monopoly. Assume that there will be two new firms with similar economic scale or size joining the market. So, do your research and discuss the following questions: What would happen to the price of gas & electricity in Sacramento? Do the sacramento residents better off or worse off as a result?
One of these four answers best represents the condition that generates a natural monopoly. Which one? OA single firm controls an industry because there are very few customers in the industry. The government prohibits entry into an industry. O The firm takes anti-competitive actions to keep other firms out. O Economies of scale are large relative to quantity demanded in a market
Which of the following is true for a monopoly? * O A firm produces a product with many close substitutes. O The industry allows free entry and exit. Firms are price-takers. O The HHI is below 10,000. O It consists of only one firm.
The inefficiency of the monopoly lies in the higher output that it sells and the lower price that it charges for its commodity. O True O False
When regulating a natural monopoly, the government always sets a price ceiling where marginal cost intersects the demand curve. O True O False
2. Suppose the cost function for a monopoly is given by TC =F+c.q where TC is the total cost, F is the fixed cost and q is the output of the firm. The demand function for the monopoly is given by q = A-bP where A > 0 and b > 0. Find out the profit maximizing price, quantity, and profit for the monopoly. Also find out the expression for the marginal revenue of the monopoly as well as the elasticity of demand facing the monopoly.
A monopoly is maximizing profit. Its marginal cost then increases. Which of the following would you expect? (Suggestion: draw a graph to help you answer this question.) O The firm will increase its output and charge a higher price. O The firm will decrease its output and charge a higher price. O The firm will decrease its output and charge a lower price. O The firm will increase its output and charge a lower price.
The graph illustrates an industry in which many firms operating in perfect competition are taken over by one firm that operates as a single-price monopoly. Draw the following shapes: 1) the consumer surplus arising from monopoly. Label it CS. 2) the deadweight loss arising from monopoly. Label it DWL 3) the loss of consumer surplus that is a gain to the monopoly as producer surplus. Label it Monopoly's gain. Indicate whether each of the following statements is true or false. At the competitive equilibrium, marginal social benefit equals marginal social cost. At the competitive equilibrium, the sum of consumer surplus and producer surplus is maximized. At the long-run competitive equilibrium, firms produce at the lowest possible long-run average cost. 30- 25- 20 15- 10- 5- Price and cost (dollars per haircut) 0+ 0.0 MR 1.0 2.0 3.0 4.0 Quantity (thousands of haircuts) MSC 5.0
Which of the following government actions is the most common for a natural monopoly in the United States? * O prevent its formation O break it up using antitrust laws use price regulation take public ownership eliminate the market
Compared to a perfectly competitive industry, a single-price monopoly produces more output the same output O less output
Identify and discuss three ways in which a perfectly competitive market structure differsfrom a Monopoly.