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Monopoly and Antitrust MCQ

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

Lower price = lower revenue

Decreasing average total cost.

Stay the same, decrease

Answer

Correct Answer: Stay the same, decrease

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Price discrimination requires ______.

Low market power

Knowing who has willingness to pay

Ease in reselling discounted products

Low elasticity of demand

Answer

Correct Answer: Knowing who has willingness to pay

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What is price discrimination?

Charging different customers different prices for different goods

Charging different customers the same price for the same good

Charging different customers the same price for different goods

Charging different customers different prices for the same good

Answer

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

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Average cost pricing ______.

Creates a price equal to marginal cost

Leads to a deadweight loss

Eliminates inefficiency

Prevents the producer from profiting

Answer

Correct Answer: Leads to a deadweight loss

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In 1911, ______ was broken up by antitrust laws.

Microsoft Engineering

The Standard Oil Trust

The Coca Cola Company

AT&T

Answer

Correct Answer: The Standard Oil Trust

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

1860s

1890s

1910s

1940s

Answer

Correct Answer: 1890s

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Most firms ______.

Have monopoly power

Are perfectly competitive

Create products that are completely unique

Create products that have good substitutes

Answer

Correct Answer: Create products that have good substitutes

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From the view of society, monopolies produce ______.

Too little of a good

Too much of a good

The perfect amount of a good

A cheap copy of a good

Answer

Correct Answer: Too little of a good

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

Holders

Trolls

Hounds

Deniers

Answer

Correct Answer: Trolls

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

6 months

10 years

20 years

50 years

Answer

Correct Answer: 20 years

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When MR = MC, a monopolist will ______ profits.

Minimize

Maximize

Have no

Begin making

Answer

Correct Answer: Maximize

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What will happen if a monopolist raises prices?

It will lose all of its customers.

It will lose some of its customers.

It will gain many customers.

It will maintain the same customer base.

Answer

Correct Answer: It will lose some of its customers.

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A horizontal demand curve happens with ______.

Pure competition

Price makers

A monopoly

A near monopoly

Answer

Correct Answer: Pure competition

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A natural monopoly occurs when ______.

Multiple companies in an industry follow a uniform code of conduct

The government requires certification and training for members of a trade

One company controls a natural resource needed to make a product

One company is more efficient than any two or more other companies

Answer

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

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

Illegal barrier

Legal barrier

Natural monopoly

Unnatural monopoly

Answer

Correct Answer: Legal barrier

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

Boycott

Market

Monopoly

Surplus

Answer

Correct Answer: Monopoly

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

Subsidy

Custom tax

Price discrimination

Sale

Answer

Correct Answer: Price discrimination

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

Natural monopoly

Natural disaster

Artificial monopoly

Market failure

Answer

Correct Answer: Natural monopoly

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

Monopoly

Oligopoly

Cartel

Syndicate

Answer

Correct Answer: Monopoly

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

Equal

Greater

Smaller

None of the above

Answer

Correct Answer: Equal

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Monopoly and Antitrust MCQ

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

Price discrimination requires ______.

What is price discrimination?

Average cost pricing ______.

In 1911, ______ was broken up by antitrust laws.

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

Most firms ______.

From the view of society, monopolies produce ______.

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

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

When MR = MC, a monopolist will ______ profits.

What will happen if a monopolist raises prices?

A horizontal demand curve happens with ______.

A natural monopoly occurs when ______.

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

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

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

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

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

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

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