Question

12) Your local water company is a considered
A) a natural monopoly and will be regulated.
B) an oligopoly and will be able to charge a price greater than marginal cost.
C) monopoly and will not be able to charge a price greater than marginal revenue.
D) perfect competition because everyone needs tap water.
E) monopolistic competition and will be able to charge a price greater than marginal cost.
13) A barrier to entry is
A) the economic term for diseconomies of scale.
B) illegal in most markets.
C) anything that protects a firm from the arrival of new competitors.
D) a factor that increases competition because firms must continue to operate in the market in
which they were founded.
E) the same as rent seeking.
14) A natural barrier to entry is defined as a barrier that arises because of
A) technology that allows one firm to meet the entire market demand at lower average total cost
than could two or more firms.
B) patents or licenses that exclude others from producing a good or service.
C) many firms producing the good and thereby allowing choice for all consumers.
D) anticompetitive practices by a firm that keep other firms from producing.
E) one firm owning a key natural resource.
15) A monopoly will arise if
A) two out of three of a town's pizzerias go out of business and only one new pizzeria opens.
B) the town council passes a law granting Nick's Pizza the exclusive right to operate in that
town.
C) Papa Joe's Pizza becomes the largest pizza producer in town and Nick's Pizza stays small in
size.
D) several big pizza chains force several small pizzerias out of business.
E) people decide they like pizza more than before so some pizzeria's gain new customers.
16) A ________ monopoly sells different units of its good or service for ________.
A) price-discriminating; different prices
B) price-discriminating; the same price
C) single-price; the same price
D) single-price; different prices
E) Both Answers A and C are correct.
17) To be able to price discriminate, a firm must
A) have a public franchise.
B) be a natural monopoly.
C) be able to prevent resales of its good.
D) have a patent.
E) have an ownership barrier to entry.

Answer 1

12):-A is right option

a natural monopoly and will be regulated.

Natural monopolies includeThe local water company

natural monopoly is defined as an industry in which one firm can achieve economies of scale over the entire range of market supply

13):-C is right option anything that protects a firm from the arrival of new competitors.

Barriers to Entry is defined as the anything that prevents new competitors from easily entering an industry

14):- A is right option,

a natural barrier to entry is defined as a barrier that arises because of technology that allows one firm to meet the entire market demand at lower average total cost than could two or more firms.

Natural barrier to entry is Occur when firms already in the industry own all a vital natural resource

15):-B is right option

A monopoly will arise if the town council passes a law granting Nick's Pizza the exclusive right to operate in that town.

16):- D is right option

Same price monopoly sells different units of its good or service for different price

single-price; the same price

price-discriminating; different prices

price dicrimination is defined as the division of customers into groups based on how much they will pay for a good