REVIEW QUESTIONS
- How is monopoly different from perfect competition?
- What is a barrier to entry? Give some examples.
- What is a natural monopoly?
- What is a legal monopoly?
- What is predatory pricing?
- How is intellectual property different from other property?
- What legal mechanisms protect intellectual property?
- In what sense is a natural monopoly “natural”?
- How is the demand curve perceived by a perfectly competitive firm different from the demand curve perceived by a monopolist?
- How does the demand curve perceived by a monopolist compare with the market demand curve?
- Is a monopolist a price taker? Explain briefly.
- What is the usual shape of a total revenue curve for a monopolist? Why?
- What is the usual shape of a marginal revenue curve for a monopolist? Why?
- How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?
- How can a monopolist identify the profit-maximizing level of output if it knows its marginal revenue and marginal costs?
- When a monopolist identifies its profit-maximizing quantity of output, how does it decide what price to charge?
- Is a monopolist allocatively efficient? Why or why not?
- How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive firm?