Question 1

The Big River Power Company is a regulated monopolist with pricing structured such that the stockholders receive a "fair" rate of return based on the firm's unit costs. Can economic thinking predict how the company executive offices are likely to be furnished? Given a choice between Hawaii and downtown Cleveland (20 miles away), where would we expect the Board of Directors to meet?

Accepted Answer

We would expect the firm to ha...

Question 2

Which of the following is true under natural monopoly?

Accepted Answer

A)   the monopolist will ignore consumers' desires.
B)   the marginal cost curve will lie below the average total cost curve.
C)   the monopolist will set price equal to marginal cost and will earn economic profits.
D)   output is produced under conditions of constant cost.E) A) and C)
F) A) and D)

Question 3

Suppose all automobile manufacturers have collusively agreed to sell their cars at a uniform price. If a firm wanted to break this agreement and not be detected, what would be one way to do this?

Accepted Answer

One Answer might be secret price cuts to...

Question 4

Mr. Stewart owns the only hardware store in a small Midwestern town. His nearest competition is more than 50 miles away, yet he does not earn any economic profit. Does someone need to explain the economic concept of monopoly to him?

Accepted Answer

Most likely, Mr. Stewart is aware of the...

Question 5

In which of the following industries would we expect collusion to be most effective?

Accepted Answer

A)   retail gasoline, where most gas is sold by a large number of small dealers
B)   crude oil production, where most oil is sold by a small number of large sellers
C)   housing construction, an industry dominated by local firms that produce unique products
D)   soybean production, where there are large numbers of farmers in many countriesE) A) and D)
F) None of the above

Exam 24: B : Price-Searcher Markets With High Entry Barriers

In which of the following industries would we expect collusion to be most effective?

Correct Answer
verified

Suppose all automobile manufacturers have collusively agreed to sell their cars at a uniform price. If a firm wanted to break this agreement and not be detected, what would be one way to do this?

Correct Answer
verified
One Answer might be secret price cuts to...
View Answer

Mr. Stewart owns the only hardware store in a small Midwestern town. His nearest competition is more than 50 miles away, yet he does not earn any economic profit. Does someone need to explain the economic concept of monopoly to him?

Correct Answer
verified
Most likely, Mr. Stewart is aware of the...
View Answer

Which of the following is true under natural monopoly?

Correct Answer
verified

Correct Answer
verified
We would expect the firm to ha...
View Answer

Exam 24: B : Price-Searcher Markets With High Entry Barriers

In which of the following industries would we expect collusion to be most effective?

Correct AnswerverifiedShow Answer

Suppose all automobile manufacturers have collusively agreed to sell their cars at a uniform price. If a firm wanted to break this agreement and not be detected, what would be one way to do this?

Correct AnswerverifiedOne Answer might be secret price cuts to...View AnswerShow Answer

Mr. Stewart owns the only hardware store in a small Midwestern town. His nearest competition is more than 50 miles away, yet he does not earn any economic profit. Does someone need to explain the economic concept of monopoly to him?

Correct AnswerverifiedMost likely, Mr. Stewart is aware of the...View AnswerShow Answer

Which of the following is true under natural monopoly?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedWe would expect the firm to ha...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
One Answer might be secret price cuts to...
View Answer

Correct Answer
verified
Most likely, Mr. Stewart is aware of the...
View Answer

Correct Answer
verified

Correct Answer
verified
We would expect the firm to ha...
View Answer