Question

make launch.sp?course assessmenude_95186 18 course de 78254 QUESTION 5 To prevent monopoly from arising, there must be a. no close substitutes for the good. b. freedom of entry into the market. c. some barriers that prevent others from entering the market. d. diseconomies of scale. QUESTION 6 When a monopoly engages in price discrimination, which of the following is correct? a. It charges different prices to different consumers and transfers some of the consumer surplus to economic profit. b. Firms enter the industry and consumer surplus increases. c. It produces a smaller quantity than when it is a single-price monopoly, which increases consumer surplus. d. Consumers are better off because the monopoly increases the quantity available for consumers to choose from. QUESTION 7 The more perfectly a monopoly can price discriminate the a. larger its output and the higher its profit. b. larger its output and the lower the price. c. smaller its output and the higher the price. d. All of the above.

Answer 1

7) ans is A. The more monopoly price discriminates the larger output will be produced and the higher profit will be achieved.

6)ans is A. When firm discriminates then some of the consumer surplus gets grabbed by producer in the form of profit.

5)B. If there is free entry and exit then there will be many firms and monopoly can be prevented.