Which of the following is a characteristic of a monopoly market?
a. A large number of buyers and sellers.
b. Mutual interdependence
c. Free entry and exit.
d. A product with no close substitutes.
d
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In the figure above, the deadweight loss created if the industry changes from perfectly competitive to a single-price, unregulated monopoly is
A) zero. B) $8.00 per day. C) $24.00 per day. D) $36.00 per day.
Assume an industry, currently dominated by one firm, experiences a large decline in fixed costs. This will
A) make entry of other firms more likely. B) make entry of other firms less likely. C) serve as higher barrier to entry. D) induce the incumbent firm to exit the industry.
Consider a market with (inverse) demand p = 100 - 2Q. There are two firms in the market with constant marginal and average costs of $10
a. Determine the Cournot equilibrium quantities and price b. What would be the collusive (joint-profit maximizing) price and quantity? c. Derive the deadweight loss from (i) Cournot Dupoly, (ii) Collusion, and (iii) Perfect competition in this market with the two firms.
Pure private goods are nonrival in consumption.
A. True B. False C. Uncertain