Exam 15: Monopoly and Antitrust Policy

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements regarding economic surplus in each market structure is true?

Merger guidelines developed by the U.S.Department of Justice and the Federal Trade Commission use the Herfindahl-Hirschman Index as a measure of concentration.This index measures concentration in an industry by

The first important law regulating monopolies in the United States was

After having a monopoly in the diamond market for many years,by 2000 the De Beers company faced competition from other companies.To maintain its market share,De Beers

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

In the United States,barriers to entry in professional team sports (for example,football and baseball)result from

Despite the popularity of the National Football League,many cable television systems do not offer their customers the NFL Network.In most cities,cable systems are monopolies so their customers cannot switch to another system that carries the NFL Network.One reason why cable systems don't offer the NFL Network is

Figure 15-8 -Refer to Figure 15-8 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.

Firms that face downward-sloping demand curves for their output in the product market are called

The De Beers diamond mining and marketing company of South Africa became one of the most profitable and longest-lived monopolies in history.Which of the following has always threatened De Beers' control of the diamond market?

By 1970,few households in the United States had cable television but two developments would lead to a substantial increase in the growth of the cable television industry.One of these developments was satellite relay technology that made it feasible for local systems to receive signals from distant broadcast stations.What was the second development?

For years the Paul Ecke Ranch had a monopoly on poinsettias.What event was responsible for the end of this monopoly?

Some economists argue that Microsoft become a monopoly in the market for computer software by developing MS-DOS,an operating system used for the first IBM personal computers.The more people who used MS-DOS-based programs,the greater the usefulness of a using a computer with an MS-DOS operating system.The explanation for Microsoft's monopoly is

The proposed merger between AT&T and T-Mobile wold be classified as a ________ merger.

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

Which of the following is true for a monopolist?

Figure 15-2 -Refer to Figure 15-2.If the monopolist charges price P* for output Q*,in order to maximize profit or minimize loss in the short run,it should

Economists played a key role in the development of merger guidelines by the Department of Justice and the Federal Trade Commission in 1982.These guidelines have three main parts.What are these parts?

Many biologic drug manufacturers are pushing for patent protection to be extended to 12 years before generics are allowed to be introduced to the market.This reflects which of the following barriers to entry?

A public franchise gives the exclusive right to produce a product for 20 years from the date the product is invented.