44) When does a natural monopoly occur?Select one:O a.when the product is sold in its natural state (such as water or diamonds)cross outO b. when there are economies of scale over the relevant range of outputcross outO c. when production requires the use of free natural resources, such as watercross outor aircross outO d. when the firm is characterized by a rising marginal-cost curve

A natural monopoly is a firm that has economics of scale as the entry barrier in the market because…

When does a natural monopoly occur? Select one: O a. when the product is sold in its natural state (such as water or diamonds) O b. when there are economies of scale over the relevant range of output O c. when production requires the use of free natural resources, such as water or air O d. when the firm is characterized by a rising marginal-cost curve

When does a natural monopoly occur? Select one: O a. when the product is sold in its natural state (such as water or diamonds) O b. when there are economies of scale over the relevant range of output O c. when production requires the use of free natural resources, such as water or air O d. when the firm is characterized by a rising marginal-cost curve

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter23: Monopoly

Section: Chapter Questions

Problem 2WNG

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How is the perceived demand curve for a monopolistically competitive film different from the perceived demand curve for a monopoly or a perfectly competitive film?
Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firmâ€”Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The pnce charged by Tile King is $20,000. Ajax has the following short-run cost curve: TC=800,0005,000Q+100Q2 Compute the marginal cost curve for Ajax. Given Ajaxs pricing strategy, what is the marginal venue function for Ajax? Compute the profit-maximizing level of output for Ajax. Compute Ajaxs total dollar profits.
Why does a monopoly arise? O because of diseconomies of scale because entry to an industry is blocked because of elastic demand because firms want to maximize profits
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
Suppose a perfectly competitive industry can produce a product with total cost TC = 30 and the market demand for the product is given by Q = 120- Suppose that the same market can be served by a monopolist operates with the same cost and demand functions. How does the consumer surplus change due to monopoly relative to perfect competition? O It falls by 3600 It does not change OIt falls by 6000 It falls by 4800
QUESTION 25 For a monopoly firm: CA. total revenue is a straight, O B. the marginal revenue curve lies OC the marginal revenue curve lies D. the marginal revemue curve upsloping line because a firm's sales are independent of product price above the demand curve because below the demand curve lies below the demand curve any reduction in price applies to because any reduction in price because any reduction in all units sold applies to all units sold price applies only to the extra unit sold
Price (Dollars per Garment) 7 D E 5 АС-МC Demand Marginal Revenue 20 Garments cleaned per year (millions) The long run average and marginal cost of dry-cleaning services is $5, as shown in the graph. Given the demand curve and the marginal revenue curve shown in the graph, which of the following is true? Select one: O . If the industry were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $7 per garment. Ob. If the industry were perfectly competitive, 10 million garments would be cleaned each year. If the market were served by a profit-maximizing monopoly, the price of dry-cleaning services would be $5 per garment and monopoly economic profit would be zero. O d. If the industry were perfectly competitive then the long-run equilibrium price of dry-cleaning services would be $7 per garment.
The following table provides information about long-run average cost curve of a firm: Quantity LRAC 100 50 200 43 300 39 400 39 500 44 600 52 O a. This cost structure is an example of natural monopoly. O b. For the first 300 units of output, this firm has diseconomies of scale. O c. For output levels greater than 400, the firm has economies of scale. O d. For output levels between 300 and 400, the firm has constant returns to scale.
Relative to a perfectly competitive market, as long as the monopolist does not benefit from substantial economies of scale, O A. price and quantity are higher under monopoly OB. price and quantity are lower under monopoly C. quantity is higher and price is lower under monopoly D. quantity is lower and price is higher under monopoly O E. there are no differences in price and quantity
The figure to the right shows the average cost of production (AC) for a cable company that is a monopoly as well as the corresponding demand (D) for cable subscriptions in the city to which the company provides service. Is this company a natural monopoly? This firm O A. is a natural monopoly because average cost is decreasing when it crosses demand. B. is not a natural monopoly because its demand is downward sloping. C. is a natural monopoly because total cost does not always increase with output. O D. is a natural monopoly because it has excess capacity. O E. is not a natural monopoly because it must advertise. Price (dollars per subscription) 80- 76- 72- 68- 64- 60- 56- 52- 48- 44- 40- 36- 32- 28- 24- 20- 16- 12- 8- 4- 0- D AC 5 6 8 9 Quantity (cable subscriptions in 1000s) Ⓡ 10
Over a recent family dinner, your Aunt Trudy expresses her disdain for price discriminating monopoly businesses, to which you, having taken some economics reply, "A perfect price discriminating monopoly may convert all of the consumer surplus to monopoly profit, but at least it produces O A. more output than a competitive industry would produce. OB. the same output that a competitive industry would produce. C. at the minimum of its average total cost (ATC) curve. D. where its marginal cost (MC) curve is still declining.
One of the requirements for a monopoly is that Select one: a. The product cannot be produced by small firms. b. There is a unique product with no close substitutes. O c. Products are high priced. O d. There are several close substitutes for the product