Hood College Econ 206: Homework 5 Multiple Choice Questions 1)Which of the following is most unlikely to present a barrier to entry into a market? market forces patent laws technological advantages deregulation     Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following

Hood College

Econ 206: Homework 5

Multiple Choice Questions

1)Which of the following is most unlikely to present a barrier to entry into a market?

1. 1. market forces
   2. patent laws
   3. technological advantages
   4. deregulation

2. Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?

1. 1. prices that can be charged

 B. natural monopoly

C. conditions of entry in a certain industry

D. quantities that can be produced

3. Government                            regulations specify that inventors will maintain exclusive legal rights to their respective inventions for    .

1. 1. patent; a limited time
   2. trademark; an unlimited time
   3. copyright; a limited time
   4. trade secret; an unlimited time

4. The use of sharp, temporary price cuts as a form of                  would enable traditional US automakers to discourage new competition from smaller electric car manufacturers.

1. 1. natural monopoly
   2. monopolistic competition

C. predatory pricing

D. oligopolistic competition

5. A firm that holds a monopoly position in the market place is

1. a price maker
2. a price taker
3. monopolistically competitive
4. subject to infinite market forces

6. A monopolist is able to maximize its profits by

1. setting the price at the level that will maximize its per-unit profit.

producing output where MR = MC and charging a price along the demand curve.

2. setting output at MR = MC and setting price at the demand curve's highest point.
3. producing maximum output where price is equal to its marginal cost.

7. Which one of the following is the most accurate description of a monopolist?

1. a sole producer of a narrowly defined product class, such as brown, Grade A eggs produced in Eagle County, Colorado
2. a firm that is very large relative to all its competitors within a narrow product class
3. a sole producer of a product for which good substitutes are lacking in a market with high barriers to entry
4. a large, multinational firm that produces a single product in a narrow product class

8. When a natural monopoly exists in a given industry, the per-unit costs of production will be

1. lowest when there are a large number of producers in the industry.
2. lower for the smaller firms than for larger firms.
3. minimized at the output that maximizes the industry's profitability.
4. lowest when a single firm generates the entire output of the industry.

9. The slope of the demand curve for a monopoly firm is

1. horizontal, parallel to the x-axis
2. vertical, parallel to the y-axis
3. upward sloping

D. downward sloping