Pure monopoly refers to a standardized product being produced by many firms. a large number of firms producing a differentiated product. any market in which the demand curve for the firm is downsloping. a single firm producing a product for which there are no close substitutes.
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Step 1: A pure monopoly refers to a market structure in which there is only one firm that produces a product for which there are no close substitutes. Show more…
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A monopoly firm is different from a perfectly competitive firm in that: A monopolist can influence market price whereas a perfectly competitive firm cannot. A competitive firm has a u-shaped average cost curve whereas a monopolist does not. There are many substitutes for a monopolist's product whereas there are no substitutes for a competitive firm's product. A monopolist's demand curve is perfectly inelastic whereas a perfectly competitive firm's demand curve is perfectly elastic.
Azat N.
A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for computer technology. Patents are granted to inventors of products or processes for a certain number of years to encourage innovation. Without patents, research and development needed to improve computer technology are unlikely to occur, as nothing would then prevent other firms from stealing ideas and copying products. Which of the following best explains the barriers to entry that exist in this scenario? Exclusive ownership of a necessary resource Legal barriers Increasing returns to scale
Crystal W.
A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for tanzanite. The mines for this blue-purple gemstone, found only in Tanzania, are owned by the local government. Given that no one is allowed into the mines without government permission, the market structure for tanzanite highly resembles that of a monopoly. Which of the following best explains the barriers to entry that exist in this scenario? A. Exclusive ownership of a necessary resource B. Legal barriers C. Increasing returns to scale
Rachel G.
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