Q16. One reason why economists object to monopolies is that ............ a) profit is not effectively minimised b) resources are not used efficiently c) output is always on a small scale d) economies of scale cannot be reaped Q17. The equilibrium price of a commodity is determined by the ............ a. market supply of the commodity b. market demand for the commodity c. number of buyers for the commodity
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Economists object to monopolies primarily because b) resources are not used efficiently. In a monopoly, a single firm controls the entire market, which can lead to inefficiencies such as higher prices and lower output than in a competitive market. Show more…
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Critically evaluate and explain each statement: a. Because they can control product price, monopolists are always assured of profitable production by simply charging the highest price consumers will pay. b. The pure monopolist seeks the output that will yield the greatest per-unit profit. c. An excess of price over marginal cost is the market's way of signaling the need for more production of a good. d. The more profitable a firm, the greater its monopoly power. e. The monopolist has a pricing policy; the competitive producer does not. f. With respect to resource allocation, the interests of the seller and of society coincide in a purely competitive market but conflict in a monopolized market. g. In a sense the monopolist makes a profit for not producing; the monopolist produces profit more than it does goods.
A monopolist sets a. the highest possible price. b. a price corresponding to minimum average total cost. c. a price equal to marginal revenue. d. a price determined by the point on the demand curve corresponding to the level of output at which marginal revenue equals marginal cost. e. none of the above.
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Some analysts consider oligopolies to be potentially less efficient than monopoly firms because at least monopoly firms tend to be regulated. Arguments in favor of a more benign view of oligopolies include: a. Oligopolies are self-regulating. b. Oligopolies can be kept in line by foreign competition. c. Oligopolistic industries may promote technological progress. d. Oligopolies may engage in limit pricing to keep out
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