Monopolies

Which image below is the best example of non-price competition?

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A monopoly is when:

• One seller/business dominates an industry.

• A few sellers/businesses dominate an industry.

• Supply exceeds demand.

• A business offers special gifts and coupons.

Why are monopolies usually illegal in the US?

• They deprive the consumer of choices.

• They force the consumer to pay high prices.

• They make it difficult for new companies to enter the market.

• All of the above.

Why do natural monopolies occur?

• It's logistically impossible for new companies to enter the market.

• It's too expensive for other companies to enter the market.

• The existing company retaliates against new companies.

• Both A&B are correct.

Why are geographic monopolies common in small towns?

• Small towns can't afford police security for new shops.

• Small towns usually have just one seller of a given item.

• The residents of small towns vote against having new shops.

• The residents of small towns don't want jobs from new shops.

A technological monopoly involves:

• Stealing plans from another business.

• Being the only seller in a small town.

• Having a patent for a new invention or scientific process.

• Having a few sellers in the market.

What can happen when a pharmaceutical company has a technological monopoly on certain medications?

• Lifesaving medicines may be too expensive to afford.

• Owning the patent on medicines means other companies may not be able to improve upon them.

• Generic versions of medicines cannot be produced.

• All of the above

Which picture is an example of a government monopoly?

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In an oligopoly...

• One seller dominates the market

• A few sellers dominate the market

• Many sellers are in the market

• No sellers exist in the market

Collusion is...

• Illegal

• When oligopolists cooperate for their own benefit.

• When oligopolists fix prices and harm the consumer and the competition.

• All of the above