Eco Chapter 12

Study Questions for Chapter 12 – ECN 5050

2. The fundamental source of monopoly power is

|a. |barriers to entry. |

|b. |profit. |

|c. |decreasing average total cost. |

|d. |a product without close substitutes. |

5. Which of the following is an example of a barrier to entry?

|a. |Matthew offers free samples of his latest flavored coffee drink to entice customers to buy a cup. |

|b. |Mark charges a lower price to students than to faculty for his tattoo services. |

|c. |Luke charges a higher hourly price to business students than to liberal arts students for his economics tutoring. |

|d. |John obtained a copyright for the song he wrote and recorded. |

11. What is the shape of the monopolist’s marginal revenue curve?

|a. |a downward-sloping line that is identical to the demand curve |

|b. |a downward-sloping line that lies below the demand curve |

|c. |a horizontal line that is identical to the demand curve |

|d. |a horizontal line that lies below the demand curve |

14. For a monopolist, when does marginal revenue exceed average revenue?

|a. |never...