Exam 15: Monopoly and Antitrust Policy

Figure 15-18 -Refer to Figure 15-18 to answer the following questions. a.What quantity will this monopoly produce and what price will it charge? b.Suppose the government decides to regulate this monopoly and imposes a price ceiling of $25.Now what quantity will the monopoly produce and what price will it charge? c.Will every consumer who is willing to pay the ceiling price of $25 be able to buy the product? Briefly explain.

Figure 15-1 -Refer to Figure 15-1.Which of the following statements about the firm depicted in the diagram is true?

When the government makes a firm the exclusive legal provider of a good or service, it grants the firm

Although some economists believe network externalities are important barriers to entry, other economists disagree because

The Clayton Act is an antitrust law that was passed to

Figure 15-4 Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4.What is the price charged for the profit-maximizing output level?

Article Summary In late 2017, informed sources announced that telecommunications companies T-Mobile and Sprint were engaged in active discussions about a potential merger. The 3rd and 4th largest wireless carriers in the United States have had frequent conversations about a stock-for-stock merger, with T-Mobile parent Deutsche Telekom becoming the majority owner of the combined firms and T-Mobile CEO John Legere expected to lead the company. Part of the discussions have been whether the Department of Justice and the Federal Trade Commission would approve the merger, and based on those discussions, whether both companies will choose to proceed with a deal. Source: David Faber, "T-Mobile and Sprint are in active talks about a merger," cnbc.com, September 19, 2017. -Refer to the Article Summary.The standards used by the Department of Justice and the FTC to evaluate a potential merger such as the one between T-Mobile and Sprint are based on market concentration as determined by the

If a monopolist's price is $50 at 63 units of output and average total cost equals $43, then the firm's total profit is

Figure 15-4 Figure 15-4 shows the demand and cost curves for a monopolist. -Refer to Figure 15-4.What is the amount of the monopoly's total revenue?

Economic efficiency requires that a natural monopoly's price be

BHP Billiton is a Canadian company that owns mines in Canada that

Figure 15-3 Figure 15-3 above shows the demand and cost curves facing a monopolist. -Refer to Figure 15-3.What happens to the monopolist represented in the diagram in the long run, if costs and demand stay the same?

Table 15-2 The government of a small developing country has granted exclusive rights to Linden Enterprises for the production of plastic syringes. Table 15-2 shows the cost and demand data for this government-protected monopolist. -Refer to Table 15-2.What is the amount of profit that the firm earns?

"Being the only seller in the market, the monopolist can choose any price and quantity it desires." Evaluate this statement: Is it true or false? Explain your answer.

Explain whether a monopoly that maximizes profit will also be maximizing revenue and production.

Figure 15-2 Figure 15-2 above shows the demand and cost curves facing a monopolist. -Refer to Figure 15-2.To maximize profit, the firm will produce at output level

The De Beers Company, one of the longest-lived monopolies, is facing increasing competition.One source of competition comes from people who might resell their previously owned diamonds.Why is De Beers worried that people might resell their previously owned diamonds?

Identify four reasons for high entry barriers.Briefly explain each reason.

In regulating a natural monopoly, the price strategy that ensures the highest possible output and zero profit is one that sets price

The 10-year protection period from generic competition for drug manufacturers is a form of