In a perfectly competitive industry, the industry demand curve is ____, while in a monopolistic industry, the industry demand curve is:
downward sloping; downward sloping.
Why does the government allow some markets to be monopolized by granting patents?
to promote technological progress
If there are economies of scale throughout the relevant output range of production, which is false?
It would typically result from a firm's possession of an exclusive patent.
Many communities have granted monopoly rights to cable companies. This is an example of a monopoly created through:
When a single firm can produce output over the relevant range of demand more efficiently than two or more firms can, because of the existence of economies of scale, we have:
a natural monopoly.
A natural monopoly is likely to arise when:
economies of scale exist over the relevant range of demand.
Which of the following is false?
A monopoly firm is a price maker, and it will pick a price that is the highest point on its demand curve.
A market structure in which only one firm survives because of economies of scale:
is called a natural monopoly.
A natural monopoly exists if:
average cost of production is lowest when only one firm produces the entire industry output.
Which of the following is not potentially a barrier to entry into a product market?
the absence of economies of scale in the product market
Which of these contributes to the existence of monopoly power?
All of the above contribute to the existence of monopoly power.