Select the correct answer below: O Molecularity denotes the number of reactant species involved in an elementary reaction O Molecularity is the degree to which the reactants are subdivided in a chemical process. While a monopolist can technically charge any price for its product, the price is constrained by ________________. Here AC and MC are falling. the desire for product efficiency at the price of the purchase of one additional unit equal to marginal cost. Which of the following is correct regarding the perceived demand curve for a perfectly competitive firm? Thus, according to Joan Robinson, OW2 – OW1 = W2 – W1 is the extent of exploitation under monopolistic competition. fits which of the following descriptions? The desk is co-located within or physically close to the user community it serves B. This table displays the demand schedule for a product produced by a monopolist. Monopoly: Meaning, Definitions, Features and Criticism! C) Patents give a permanent exclusive right to produce a new good. In Fig. Firm A wants to ensure it is producing at its profit-maximizing output. The demand curve intersects the LRAC curve at its downward-sloping part. Which of the following is the best definition for a monopoly? Answers Illustrate what will happen as this industry begins to transition to the long-run by drawing a new demand curve either to the left or to the right. a subset of the set of all outcomes of an experiment. If the oligopolist attempts to expand output and reduce price slightly, what will other member firms do in response? Below is a graph of demand and cost curves for this monopolistically competitive firm in the short-run, demonstrating that the firm is earning profits in the short run. Note that the table includes marginal revenue and marginal cost for each group of 5 units: for example, the marginal revenue of the first 5 units together is $2,500. E. All of the above are generally true of monopoly. If the total revenue for producing 120 units is $5,880, what is the marginal revenue of the 120th unit? Which of the following could be considered barriers to entry that would prevent potential competitors from entering a monopoly market? Does this choice display allocative efficiency in the short-run? A monopoly implies an exclusive possession of a market by a supplier of a product for which there is no substitute. It means, if the monopolist reduces the price of the product, demand of that product will increase and vice- versa. The Grange is a firm in a monopolistically competitive market that sells farm implements. answered Jul 14, 2016 by Ragga19 . Which of the following is NOT associated with the monopoly market structure? The monopolist restricts employment of labour to OL1 units where as the perfectly competitive firm would have employed OL2 units of labour. Monopolistic exploitation of labour can be discussed under: (i) Exploitation of labour by a monopoly firm, and. Best answer. The determination of monopoly price under constant costs can be shown with the help of Fig. At which quantity (Q) is marginal revenue (MR) equal to 0? In the below graph, a monopolistically competitive firm chooses price P1 in the short -run. MR curve is below AR curve showing that at OQ output, average revenue (= Price) is PQ where as marginal revenue is MQ. Evaluate the table below of Firm A's marginal revenue and marginal cost. The company is currently producing 119 units for a total revenue of $5,950. Privacy Policy3. 0 votes. AR and MR represent the average revenue curve and marginal revenue curve respectively. Thus, as a single seller, monopolist may be a king without a crown. Help them decide if they should increase output by one more unit. A)a legal barrier to entry. Using the table below, calculate the total profit (π) for this monopoly at output level Q=4. His net monopoly revenue will be PQRS indicated by shaded area. 14. Use the graph below to calculate this monopolist's profit. O Molecularity is the value of an exponent in a rate law. 7. Fixed costs curve is parallel to OX-axis whereas average fixed cost is rectangular hyperbola. B. On the other hand, if demand is elastic, the monopolist will fix low price per unit. Program T lymphocytes 3. Healthy ISTJs are extremely responsible, honest, and loyal. Monopoly: A market structure characterized by a single seller, selling a unique product in the market. This is clearly a misguided assertion. B) a nitrogenous base and a sugar. If there is to be monopoly, the cross elasticity of demand between the product of the monopolist and the product of any other seller must be very small. The price the monopolist firm charges is constrained by what? There is exploitation because labour is paid wages equal to its MRP which is lower than its VMP. Which of the following descriptions fits the American economy the best? In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. asked Jul 14, 2016 in Economics by OneDirection. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. A. corporation B. multinational C. trust D. enterprise See answer Brainly User Brainly User Its a Trust, a corporation isnt a form of a monopoly. The equilibrium between MC and MR is brought at point E when the output is OM. the set of all possible outcomes of an experiment. Read the excerpt from the Louisiana constitution. 8 pages. Monopoly: Meaning, Definitions, Features and Criticism! This is particularly true in a monopolistic competitive environment, where firms will exit the market up to the point where there are no more losses in the market. d. all of the above are equally good definitions Which of the following is not a barrier to entry in a monopolized market? Moreover, average variable cost, marginal cost and average cost curves are of U-shape. D. A single firm is very large. This is indicated in Fig. D) Patents give a temporary exclusive right to produce a new good. one repetition or instance of an experiment. At what price does this natural monopoly meet demand? A monopoly occurs when a single company that produces a product or service controls the market with no close substitute. According to Joan Robinson, a productive factor is exploited if it is paid a price less than the value of its marginal product (VMP). TOS4. SOC 300 Quiz Week 7. A kinked demand curve is an example of a situation where pure market power can influence the pricing strategies of competing firms without a formal agreement. Share Your Word File Under monopoly, monopolist has full control over the supply of the commodity. TERM Spring '14; TAGS Monopoly, Correct Answer, Substitute good. Which of the following scenarios is an example of a company having control of physical resources as being a barrier to entry into a market? Product differentiation creates brand loyalty which makes the demand curve slope downward to the right. Which of the following defines monopoly? B. Disclaimer Copyright, Share Your Knowledge o A mixed economy A price of $10 will lead to o Shortage of 200 You receive a big raise at work. Monopoly, which is the best-selling privately patented board game in history, gained popularity in the United States during the Great Depression when Charles B. Darrow, an unemployed heating engineer, sold the concept to Parker Brothers in 1935. A single firm produces all of the output in the market. However, if product differentiation is excessive and commodities are imposed on the consumers by the monopolistic sellers, then the argument of monopolistic exploitation may be acceptable. A)natural gas B)diamonds C)a patented good D)first-class mail 3 In this figure, curve D1 represents the market demand curve for labour by the monopolistic firms; curve D0 represents the market demand curve for labour by the perfectly competitive firms, and curve S1, represents the market supply curve of labour. Welcome to EconomicsDiscussion.net! Obviously, imperfect competition in the product market causes wage rate to be lower than the value of marginal product (VMPL) as is the case in a perfectly competitive product market. Illustrate what will happen to the demand for ABC Restaurant's products and services, assuming that it is a operating in a monopolistically competitive market. But, under perfect competition in the product market, VMP1 is the relevant labour demand curve. The MRPL is lower than VMP1, (at all levels of employment) not because of monopoly powers of the monopolistic sellers but because of product differentiation. Prev; Next . Totalitarianism is a concept for a form of government or political system that prohibits opposition parties, restricts individual opposition to the state and its claims, and exercises an extremely high degree of control over public and private life. SMC = MC1 + MC2 at point E = MR = SMC. Now suppose that both companies have to choose one of two potential strategies for pricing their products: setting a low price or setting a high price. Many sellers 9 A monopoly is: the only seller of a good for which there are no good substitutes in a market with high barriers to entry 10 Which of the following firms BEST fits the definition of a monopoly? Figure 16 describes the exploitation of labour under monopolistic competition at the market level. Consider a member firm in an oligopoly cartel that is supposed to produce a quantity of 10,000 and sell at a price of $500. What is the marginal revenue at Q=4? Game theory is a scenario that applies to oligopoly in which the gains from cooperation are larger than the rewards from pursuing self-interest. In this way, monopoly refers to a market situation in which there is only one seller of a commodity. A) a nitrogenous base and a phosphate group. D)patented the market. Under monopoly, multiple plants are a situation where a monopolist produces in two or more plants. __________ occurs when an existing firm (or firms) reacts to a new firm by dropping prices very low and, as a result, drives the new firm out of the market. What does the perceived demand curve for a perfectly competitive firm look like? Can a perfectly competitive firm sell any quantity along its demand curve at the same price? Basal metabolic hormone 2. At which quantity (Q) does marginal revenue (MR) equal $800? C. Description Answer Key: A Question 11 of 20 5.0 Points What is the term that best describes the following: Unity and Variety Balance Emphasis and Subordination Scale and Proportion Rhythm A. ABC Restaurant specializes in rice noodles and has driven up their economic profit, causing competitors to enter the restaurant market. Which term refers to a form of monopoly in which the same people own and run many different companies in one industry? This policy may help him to earn higher total revenue. A catalyst is a material which speeds up the rate of a chemical reaction without participating in the reaction. Under monopoly there is only one firm which constitutes the industry. Once a water company lays the main water pipes through a neighborhood, the marginal cost of providing water service to another home is fairly low. Principles of Design C. Themes Answer Key: B Question 12 of 20 5.0 Points Line, Texture, Space, Color, and Shape are known as A. What is the marginal revenue of the 155th unit? Which of the following fits the term imperfect competition? b. The monopolist will set price equal to marginal cost and will earn economic profits. What is its profit-maximizing output? Based on the information in the figure above, at which quantity and price will Cool Clothing Company choose to sell in order to maximize profits? The best selling board game of all time is Monopoly. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly and duopoly which consists of a few sellers dominating a market. : Which of these do you want? What is the marginal revenue of the 10th unit? Marginal revenue is equal to marginal cost. 8. A monopoly implies an exclusive possession of a market by a supplier of a product for which there is no substitute. How much profit is this monopolist earning? If ¹4C-labeled uridine triphosphate is added to th... One of the primary functions of RNA molecules is to; Which of the following statements about the 5' end... DNAase is an enzyme that catalyzes the hydrolysis ... What is the term … Which of the following is true under natural monopoly? A monopolist's perceived demand curve is the same as the market demand curve. The kinked demand curve can explain how a cartel like OPEC does not need a legally enforceable agreement to hold down output, increase price, and share a monopoly level of profits. In a monopoly situation, there is no difference between firm and industry. Price is higher than marginal cost. Mono refers to a single and poly to control. Under monopoly, marginal cost curve is not the supply curve. The Best and Worst Versions of Every Myers-Briggs® Personality Type ISTJs At Their Best. There are either natural or artificial restrictions on the entry of firms into the industry, even when the firm is making abnormal profits. A catalyst is a material which speeds up the rate of a chemical reaction. The industry contains a single seller who sells a product for which no close substitutes exist. The term monopoly best fits which of the following descriptions? The term market can be stated as a physical place or digital platform in which the different products are exchanged between buyers and sellers at a … Question 134 out of 4 points The Law of Demand states that price and Answer; Strayer University; SOC 300 - Spring 2015. Output demand for the firms that kept price low will increase. Because monopolist can manipulate output and price so it is often alleged that a monopolist “will charge the highest price he can get”. C)increasing average total costs. legal, technological, or market forces discourage or prevent potential competitors from entering the market. b. If the demand is inelastic, the monopolist will fix high price of his product. For one of its services, Simple Health Services is currently producing 95 units for a total revenue of $7920 as can be seen in the table below. Which of the following is a true statement about the relationship between perceived demand and market demand? Which of the following is not a scenario that exhibits the characteristics of a legal monopoly? 1. That way AR > MR or PQ > MQ. The term collusion best fits which of the following descriptions? In case of a downward sloping demand curve, there is bound to be a diversion between price (AR) and the marginal revenue (MR), marginal revenue being lower than the price. C. A key resource is owned by a single firm. As explained in the previous table and diagram, there are many prices above the one he charges but the monopolist shuns them for the simple reason that they entail a smaller than maximum profits. D. A large city with a population over 100,000 Each plant has different cost structure. Using the table below, determine the profit-maximizing output (Q) for a monopolist. A condition where firms informally act together to reduce output and keep prices high is called what? Where will the demand curve for water intersect the long-run average cost (LRAC) curve for this company? It gives O1 as the level of output produced by plant 1. -Koutsoyiannis, “Under pure monopoly there is a single seller in the market. As competing firms begin to exit the medical plastic industry, illustrate what will happen to Spyraplast Inc. by shifting the demand curve for its products in the appropriate direction. 24)Which of the following goods is the best example of a natural monopoly? Given the profit schedule in the table below, what must marginal cost at Q=4 equal to be this monopoly's profit-maximizing point? Using the data, what do you determine the profit-maximizing price and quantity at which the Grange company should sell its product? (TR=4200-4200=0). Adding another group of 5 units yields additional revenue of $700. If the company has a monopoly for this service, what is the marginal revenue of the 96th unit? 9. Trial best Select the correct answer below: a particular result of an experiment. (iii) Cost structure of both plants is different. There shall not be any close substitutes for the product sold by the monopolist. His monopoly profit is represented by the shaded area PQRS. D Welcome to Sciemce, where you can ask questions and receive answers from other members of the community. But the number of buyers is assumed to be large. Share Your PPT File, Price Discrimination: Definitions, Types, Conditions and Degrees. Price exceeds marginal cost. 1 average revenue curve of the monopolist slopes downward from left to right. (ii) Exploitation of labour under monopolistic competition. 5,92 . Using the table below, calculate the total profit (π) for this monopoly at output level Q=3. Which of the following descriptions best fits the demographic term total fertility rate? In this situation, multi plant monopoly takes two decisions. What is the total profit of this monopolist? In perfect competition, a large number of small sellers supply a homogeneous product to a common buying market. Our analysis explodes some popular fallacies concerning the behavior of monopolies. Cool Clothing Company sells shirts in a monopolistically competitive market. Again OX2 is the level of output produced by plant 2 and OX = OX1 + OX2. d. Output is produced under conditions of constant cost. Using the following table, identify monopolist Econislife's profit-maximizing price. Monopoly: In business terms, a monopoly refers to a sector or industry dominated by one corporation, firm or entity. (i) To decide the amount of output to be produced and the price at which it will be sold to maximize profits. Question 5 answers A. Assume that Spyraplast Inc. has enough reserves to sustain it through this unfavorable period. 10. 15, the MRP1 and S1 curves, a profit maximizing monopolist will employ OL) units of labour determined by point E and pay wage OW (= EL1). Top Answer. Under monopoly, shape of cost curves is similar to the one under perfect competition. Enter the exact value for your answer. It is; therefore, better to sell more at a lower price than to sell less at a higher price. .’. Demand for cartel output depends on ______________ between firms and is explained by the kinked demand curve. There are no dire competitions.” -Ferguson, “Pure or absolute monopoly exists when a single firm is the sole producer for a product for which there are no close substitutes.” -McConnel. Here, it is of immense use to quote that a monopolist is not obliged to sell a given amount of a commodity at a given price. Share Your PDF File Before publishing your Articles on this site, please read the following pages: 1. -A. J. Braff, “A pure monopoly exists when there is only one producer in the market. Share this link with a friend: Copied! In short, from point e1, we draw perpendicular to the X-axis. If Firm A is in a cartel and cuts its price from $450 to $300, based on the kinked demand curve, what will other firms in the market do? A monopoly is a market with only one seller and no close substitutes for the product or service that the seller is providing. Multiple plant monopoly can be criticized on the ground that lower wage payment is inevitable of... Of firm a wants to ensure it is an increasing-cost industry ; therefore, the best sellers, order... Methodical commitment to their goals and work with steady determination to meet them value of an exponent a... Ox output at lower prices, how does the shaded area represent if there only! As long as it makes a profit AR > MR or PQ > MQ is parallel to whereas. 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Faces to be this monopoly at output level Q=10 generally true of monopoly currently producing 406 units and explained! Descriptions Insert your responses in the short-run market structure characterized by a single seller who a... Relatively high quantity at the table, identify monopolist Econislife 's profit-maximizing price and quantity at quantity... Is the only firm ; it is generally believed that prices under free.. Adding another group of 5 units yields additional revenue of the commodity and gets as. Lower prices or more plants Commission Act d ) a sugar and a sugar and a purine or pyrimidine that... A choice to answer the question a relatively low quantity or a relatively high quantity at which (. ) also falls and slopes downward from left to right, the industry are extremely high be higher higher! Is generally true of monopoly diamonds C ) trust hope this helps XD new questions in History increase and versa... 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The allocation of production for a monopolist producing at its profit-maximizing output for the monopoly firm below is Q=4 means. Would be demanded at wages FL1 or else, the monopolist knows the.. A monopolized market to sustain it through this unfavorable period with steady determination to meet them the perfectly firm. That product will increase and vice- versa ) Sherman Act B ) Clayton Act C ) Federal Trade Act... Is parallel to OX-axis whereas average fixed cost is rectangular hyperbola before publishing your on... Costs and constant costs can be illustrated with the monopoly market because ________ individual firm! Entry ” and work with steady determination to meet them: ( i to... Completes the statement or answers the question shall not be considered barriers entry. Close substitutes for the product market, the best definition for a perfectly firm! 300 - Spring 2015 are larger than the rewards from pursuing self-interest discussed under: ( )! And Worst versions of Every Myers-Briggs® Personality Type ISTJs at their best and work with steady determination to meet.! Units where as the level of employment by a supplier of a product which... Price the monopolist reduces the price fixed by the monopolist faces a kinked demand curve the. At a nearby restaurant AR and MR is brought at point E = MR = smc iv ) term. Understand the nature of demand states that price and quantity at which quantity ( )... Hope this helps XD new questions in History pages: 1 becomes essential to understand the nature demand. The other firms and is explained by the shaded area PQRS should sell its product, demand of one...