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Monopoly and Antitrust MCQ

Monopoly and Antitrust MCQ

1. If a monopoly’s fixed costs increase, its price will _____, and its profit will _____.

Answer

Correct Answer: Stay the same, decrease

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2. Price discrimination requires ______.

Answer

Correct Answer: Knowing who has willingness to pay

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3. What is price discrimination?

Answer

Correct Answer: Charging different customers different prices for the same good

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4. Average cost pricing ______.

Answer

Correct Answer: Leads to a deadweight loss

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5. In 1911, ______ was broken up by antitrust laws.

Answer

Correct Answer: The Standard Oil Trust

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6. Significant laws restricting monopolies in the United States began to be passed in the ______.

Answer

Correct Answer: 1890s

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7. Most firms ______.

Answer

Correct Answer: Create products that have good substitutes

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8. From the view of society, monopolies produce ______.

Answer

Correct Answer: Too little of a good

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9. People who buy up patents just so they can sue for infringement are known as patent ______.

Answer

Correct Answer: Trolls

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10. Patents give exclusive rights to a product for up to ______.

Answer

Correct Answer: 20 years

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11. When MR = MC, a monopolist will ______ profits.

Answer

Correct Answer: Maximize

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12. What will happen if a monopolist raises prices?

Answer

Correct Answer: It will lose some of its customers.

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13. A horizontal demand curve happens with ______.

Answer

Correct Answer: Pure competition

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14. A natural monopoly occurs when ______.

Answer

Correct Answer: One company is more efficient than any two or more other companies

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15. When a government determines who can participate in a certain type of business, it creates a(n) ______.

Answer

Correct Answer: Legal barrier

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16. A ______ occurs when there is a single supplier of a product that has no close substitutes.

Answer

Correct Answer: Monopoly

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17. The practice of charging different consumers different prices for the same good or service is called _____.

Answer

Correct Answer: Price discrimination

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18. A firm that can produce at a lower cost than several smaller firms can is called _____.

Answer

Correct Answer: Natural monopoly

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19. The single supplier of a product that has no close substitute is called _____.

Answer

Correct Answer: Monopoly

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20. Average cost pricing is setting price _____ to the average total cost.

Answer

Correct Answer: Equal

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