Exam 5: Market Power: Does It Help or Hurt the Economy

Use the following diagram to answer the following questions. -Refer to Diagram 5-1. A competitive industry would charge what price and produce what level of output?

The monopolist's demand curve:

In a monopoly industry:

Marginal revenue is defined as:

When demand and cost conditions are such that only one firm can exist in an industry:

Use the following diagram to answer the following questions. -Refer to Diagram 5-1. What price should the monopolist charge?

A monopoly is an industry composed of:

Evaluate the following statement: "Government regulation should be used to eliminate any market power that exists in the U.S. economy."

The benefit the monopolist receives when it produces and sells an additional unit of output is measured by:

A monopolist is a price taker in the market place.

Many economists argue for the passage of additional antitrust laws because they believe that market power is a major problem in the economy.

Suppose We Are Unique Corporation, a monopoly, finds that at its current production levels marginal revenue is $18 while marginal cost if $20. This company should:

Use the following diagram to answer the following questions. -Refer to Diagram 5-2. The monopolist's profits are given by area:

Suppose Kris Kraf, a monopolist is producing the profit-maximizing level of output. At this level of output we know that:

Evaluate the following statement: "Because people's lives often depend on the drugs made available from pharmaceutical companies, these companies should not be allowed to profit at the expense of these lives."

When a monopolist is maximizing profits:

Which of the following is not a source of market power in the United States?

A cartel would most likely form if:

The Organization of Petroleum Exporting Countries (OPEC) cartel had its biggest impact on oil prices in the 1970s and 1980s.

Use the following diagram. Which of the following statements is correct?