What are the major characteristics of pure monopoly?
What will be an ideal response?
A pure monopolist is the only seller of a product for which there are no close substitutes. To maintain this position as the sole seller of a unique product, there must be barriers to entry. Also, the monopolist has “price making” power because the monopolist is the industry and supplies the entire market for the product. Given a down sloping demand for the product, the monopolist must decrease price to increase quantity sold. Finally, advertising under pure monopoly often depends on the nature of the product and whether the monopolist feels there is a need to increase demand for the product.
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If the economy were producing at its potential output, then the unemployment rate would be less than the target rate of unemployment.
Answer the following statement true (T) or false (F)
Behavioral economic policy is likely to:
A. be based on the assumption of rationality. B. take into account people's predictably irrational behavior. C. suggest no government involvement. D. assume that the way choices are presented doesn't affect the decision made.
If a nation's exports are $55 billion, while its imports are $50 billion, we can conclude with certainty that this nation is experiencing a
A. balance of trade surplus. B. balance of payments surplus. C. positive balance on current account. D. positive balance on capital account.
A shortage or a surplus can exist when the current price is equal to the equilibrium price
a. true b. false