51.Drugcompaniesareallowedtobemonopolistsinthedrugstheydiscoverinorderto a.increasetheavailabilityofexpensivebutusefulmedications. b.increasetheoverallwelfareofsocietythroughbetterhealthbecausedrugcompaniescontinuallyproducebettermedications. c.encourageresearch. d.Alloftheabovearecorrect. 52.Drugcompaniesareallowedtobemonopolistsinthedrugstheydiscoverinorderto a.allowdrugcompaniestochargeapricethatisequaltotheirmarginalcost. b.discouragenewfirmsfromenteringthedrugmarket. c.allowthegovernmenttoearnpatentrevenue. d.Noneoftheaboveiscorrect. 53.Authorsareallowedtobemonopolistsinthesaleoftheirbooksinorderto a.encourageauthorstowritemoreandbetterbooks. b.correctforthenegativeexternalitiesthattheInternetandtelevisionimpose. c.satisfyliteraryadvocacygroupsthatexercisetheirlobbyingpower. d.promoteasocietyinwhichpeoplethinkforthemselvesandlearnfromwhicheverbookstheyplease. 54.Authorsareallowedtobemonopolistsinthesaleoftheirbooksinorderto a.promoteasocietyinwhichpeoplethinkforthemselvesandlearnfromwhicheverbookstheyplease. b.correctforthenegativeexternalitiesthattheInternetandtelevisionimpose. c.satisfyliteraryadvocacygroupsthatexercisetheirlobbyingpower. d.Noneoftheaboveiscorrect. Figure15-1 55.RefertoFigure15-1.Theshapeoftheaveragetotalcostcurverevealsinformationaboutthenatureofthebarriertoentrythatmightexistinamonopolymarket.Whichofthefollowingmonopolytypesbestcoincideswiththefigure? a.ownershipofakeyresourcebyasinglefirm b.naturalmonopoly c.government-createdmonopoly d.apatentorcopyrightmonopoly 56.RefertoFigure15-1.Theshapeoftheaveragetotalcostcurveinthefiguresuggestsanopportunityforaprofit-maximizingmonopolisttotakeadvantageof a.economiesofscale. b.diseconomiesofscale. c.diminishingmarginalproduct. d.increasingmarginalcost. 57.RefertoFigure15-1.Consideringtherelationshipbetweenaveragetotalcostandmarginalcost,themarginalcostcurveforthisfirm a.mustlieentirelyabovetheaveragetotalcostcurve. b.mustlieentirelybelowtheaveragetotalcostcurve. c.mustbeupwardsloping. d.doesnotexist. 58.RefertoFigure15-1.Consideringtherelationshipbetweenaveragetotalcostandmarginalcost,themarginalcostcurveforthisfirmmust a.lieentirelyabovetheaveragetotalcostcurve. b.lieentirelybelowtheaveragetotalcostcurve. c.beU-shaped. d.behorizontal. Scenario15-1 ConsideratransportationcorporationnamedReading’sthathasjustcompletedthedevelopmentofanewlightrailsysteminMinneapolis.Currently,thereareplentyofseatsonthetrain,anditisnevercrowded.Itscapacityfarexceedstheneedsofthecity.Afterjustafewyearsofoperation,theshareholdersofReading’sexperiencedincrediblyhighratesofreturnontheirinvestmentduetotheprofitabilityofthecorporation. 59.RefertoScenario15-1.Whichofthefollowingstatementsismostlikelytobetrue? (i)NewentrantstothemarketknowtheywillhaveasmallermarketsharethanReading’s currentlyhas. (ii)Reading’sisanaturalmonopoly. (iii)Reading’sismostlikelyexperiencingincreasingaveragetotalcost. a.(i)and(ii)only b.(ii)and(iii)only c.(i)and(iii)only d.(i),(ii),and(iii) 60.RefertoScenario15-1.Whichofthefollowingstatementsismostlikelytobetrue? (i)NewentrantstothemarketknowtheywillhaveasmallermarketsharethanReading’s currentlyhas. (ii)Reading’sismostlikelyexperiencingdecreasingaveragetotalcost. (iii)Reading’sisanaturalmonopoly. a.(i)and(ii)only b.(ii)and(iii)only c.(i)and(iii)only d.(i),(ii),and(iii) Scenario15-2 […]