1. What is a pure monopoly?
A. a market structure in which there are many substitute products
B. an industry with one firm
C. a market where a government is one of the largest buyers
D. a market structure maintained by entry of many rival firms
2. Which of the following is not an example of a barrier to entry?
A. A taxi cab driver obtains a license to legally provide transportation in Berlin.
B. A tomato grower is the first in her county to use a new brand of fertilizer.
C. Microsoft obtains a copyright for its Windows operating system.
D. A pharmaceutical company obtains a patent for a new vaccine for meningitis.
3. If a single firm monopolizes the market for rice then
A. Price will be lower than the marginal revenue of the last unit produced
B. The monopolist will price on the inelastic portion of the demand curve
C. Output will probably be lower than output if the market were competitive
D. There is no consumer surplus
4. Which of the following is a characteristic of monopolistic competition?
A. reliance on a patent system
B. ownership of a key resource by a single firm
C. identical products
D. free entry
5. Which of the following product markets is best described by monopolistic competition?
A. sewage treatment
B. postage stamps
C. crude oil
D. t-shirts