Exam 15: Monopoly and Antitrust Policy

Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. -Refer to Table 15-1.What is the firm's profit-maximizing output and what is the price charged to sell this output?

Beginning in 1965, the head of the Antitrust Division of the U.S.Department of Justice began to change antitrust policy.How did antitrust policy change?

The lawsuit the Justice Department brought against Apple regarding the pricing of e-books for its iPad is an example of attempts by the government

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 profit?

What type of protection does U.S.law grant the creator of a book, film, or piece of music?

Table 15-4 Shakti Inc.has been granted a patent for its Arnica toothache balm.Table 15-4 shows the demand and the total cost schedule for the firm. -Refer to Table 15-4.What is the amount of Shakti's profit?

A market economy benefits from market power

If you own the only bookstore in a small town, do you have a monopoly?

Provide two examples of a government barrier to entry.

In reality, because few markets are perfectly competitive, some loss of economic efficiency occurs in the market for nearly every good or service.

Research has shown that most economic profits from selling a prescription drug are eliminated 20 years after the drug is first offered for sale.The main reason for the elimination of profits is

"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.

For a natural monopoly, the marginal cost of producing an additional unit of its product is relatively small.

According to the Department of Justice merger guidelines, a proposed merger between two firms may be challenged if the post-merger Herfindahl-Hirschman Index

The possibility that the economy may benefit from having market power, rather than being very competitive, is closely identified with which famous economist?

A merger between firms at different stages of production of a good

Table 15-1 A monopoly producer of foreign language translation software faces a demand and cost structure as given in Table 15-1. -Refer to Table 15-1.When producing the profit-maximizing output, what is the amount of the firm's profit?

If a monopolist's price is $50 at the output where marginal revenue equals marginal cost and average total cost is $43, then the incremental profit from the last unit sold is $7.

Figure 15-10 -Refer to Figure 15-10.What is the area that represents producer surplus under a monopoly?

To maximize profit, a monopolist will produce and sell a quantity such that for the last unit sold, marginal revenue equals marginal cost, and charges a price given by the demand curve at that output level.