ECON 402 Final Exam || Questions and 100% Verified Answers.
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Course
ECON 402
Institution
ECON 402
Monopoly correct answers is a market structure consisting of a firm that is the only seller of a good or service that does not have a close substitute.
Barriers to entry correct answers anything that keeps new firms from entering an industry in which firms are earning economic profit
barriers...
ECON 402 Final Exam || Questions and 100% Verified
Answers.
Monopoly correct answers is a market structure consisting of a firm that is the only seller of a
good or service that does not have a close substitute.
Barriers to entry correct answers anything that keeps new firms from entering an industry in
which firms are earning economic profit
barriers to entry for monopoly correct answers 1. Government restrictions on entry
2. Control over a key resource
3. Network externalities
4. Natural monopoly
copyright correct answers provide the exclusive right to produce and sell creative works like
books and film
patent correct answers the exclusive right to produce a product for a period of 20 years from the
date the patent is filed with the government.
trademark correct answers "brand name"
public franchises correct answers a government designation that a firm is the only legal provider
of a good or service
network extranalities correct answers the usefulness of a product increases with the number of
consumers who use it
natural monopoly correct answers occurs when economies of scale are so large that one firm can
supply the entire market at a lower average total cost than can 2 or more firms
total revenue correct answers price * quantity
average revenue correct answers total revenue / quantity
marginal revenue correct answers change in total revenue / change in quantity
maximizing profit correct answers MC = MR
producing the quantity where the additional revenue from the last unit (marginal revenue) just
equals the additional cost incurred from its production (marginal cost).
long run profits for monopoly correct answers Since there are barriers to entry, additional firms
cannot enter the market.
• So there is no distinction between the short run and long run for a
monopoly.
, Then, unlike for monopolistic competitors, we expect monopolists to continue to earn profits in
the long run.
market power correct answers the ability of a firm to change a price greater than marginal cost
antitrust laws correct answers laws focused on eliminating illegal acts in order to cheat others
and starting competition among firms
horizontal mergers correct answers mergers between firms in the same industry
vertical mergers correct answers between two firms at different stages of the production process
how to tell if merger was acceptable correct answers 1. Market definition
2. Measure of concentration
3. Merger standards
Herfindahl-Hirschman Index (HHI) correct answers to determine if a market is concentrated
-created by squaring the percentage market shares of each firm, and adding the results
monopolistic competition correct answers a market structure in which barriers to entry are low
and many firms compete by selling similar, but not identical products
(starbucks sells coffee and competes in the coffee market against other firms selling coffee but
aren't the same)
product efficiency correct answers refers to producing items at the lowest possible cost
allocative efficiency correct answers refers to producing all goods up to the point where the
marginal benefit to consumers is just equal to the marginal cost to firms
marketing correct answers all the activities necessary for a firm to sell a product to a consumer
brand management correct answers the actions of a firm intended to maintain the differentiation
of a product over time
oligopoly correct answers a market structure in which a small number of interdependent firms
compete, will require completely different tools to analyze
economies of scale correct answers the situation when a firm's long-run average costs fall as the
firm increases output
ownership of a key input correct answers if control of a key input is held by one or a small
number of firms, it will be difficult for additional firms to enter
government-imposed barriers correct answers governments might grant exclusive rights to some
industry to one or a small number of firms
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