Review Questions

7. How is monopoly different from perfect competition?

8. What is a barrier to entry? Give some examples.

9. What is a natural monopoly?

10. What is a legal monopoly?

11. What is predatory pricing?

12. How is intellectual property different from other property?

13. What legal mechanisms protect intellectual property?

14. In what sense is a natural monopoly “natural”?

15. How is the demand curve perceived by a perfectly competitive firm different from the demand curve perceived by a monopolist?

16. How does the demand curve perceived by a monopolist compare with the market demand curve?

17. Is a monopolist a price taker? Explain briefly.

18. What is the usual shape of a total revenue curve for a monopolist? Why?

19. What is the usual shape of a marginal revenue curve for a monopolist? Why?

20. How can a monopolist identify the profit-maximizing level of output if it knows its total revenue and total cost curves?

21. How can a monopolist identify the profit-maximizing level of output if it knows its marginal revenue and marginal costs?

22. When a monopolist identifies its profit-maximizing quantity of output, how does it decide what price to charge?

23. Is a monopolist allocatively efficient? Why or why not?

24. How does the quantity produced and price charged by a monopolist compare to that of a perfectly competitive firm?

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