Monopoly and Antitrust MCQs

Monopoly and Antitrust MCQs

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1: Average cost pricing is setting price _____ to the average total cost.

A.   Equal

B.   Greater

C.   Smaller

D.   None of the above

2: The single supplier of a product that has no close substitute is called _____.

A.   Monopoly

B.   Oligopoly

C.   Cartel

D.   Syndicate

3: A firm that can produce at a lower cost than several smaller firms can is called _____.

A.   Natural monopoly

B.   Natural disaster

C.   Artificial monopoly

D.   Market failure

4: The practice of charging different consumers different prices for the same good or service is called _____.

A.   Subsidy

B.   Custom tax

C.   Price discrimination

D.   Sale

5: A ______ occurs when there is a single supplier of a product that has no close substitutes.

A.   Boycott

B.   Market

C.   Monopoly

D.   Surplus

6: When a government determines who can participate in a certain type of business, it creates a(n) ______.

A.   Illegal barrier

B.   Legal barrier

C.   Natural monopoly

D.   Unnatural monopoly

7: A natural monopoly occurs when ______.

A.   Multiple companies in an industry follow a uniform code of conduct

B.   The government requires certification and training for members of a trade

C.   One company controls a natural resource needed to make a product

D.   One company is more efficient than any two or more other companies

8: A horizontal demand curve happens with ______.

A.   Pure competition

B.   Price makers

C.   A monopoly

D.   A near monopoly

9: What will happen if a monopolist raises prices?

A.   It will lose all of its customers.

B.   It will lose some of its customers.

C.   It will gain many customers.

D.   It will maintain the same customer base.

10: When MR = MC, a monopolist will ______ profits.

A.   Minimize

B.   Maximize

C.   Have no

D.   Begin making

11: Patents give exclusive rights to a product for up to ______.

A.   6 months

B.   10 years

C.   20 years

D.   50 years

12: People who buy up patents just so they can sue for infringement are known as patent ______.

A.   Holders

B.   Trolls

C.   Hounds

D.   Deniers

13: From the view of society, monopolies produce ______.

A.   Too little of a good

B.   Too much of a good

C.   The perfect amount of a good

D.   A cheap copy of a good

14: Most firms ______.

A.   Have monopoly power

B.   Are perfectly competitive

C.   Create products that are completely unique

D.   Create products that have good substitutes

15: Significant laws restricting monopolies in the United States began to be passed in the ______.

A.   1860s

B.   1890s

C.   1910s

D.   1940s

16: In 1911, ______ was broken up by antitrust laws.

A.   Microsoft Engineering

B.   The Standard Oil Trust

C.   The Coca Cola Company

D.   AT&T

17: Average cost pricing ______.

A.   Creates a price equal to marginal cost

B.   Leads to a deadweight loss

C.   Eliminates inefficiency

D.   Prevents the producer from profiting

18: What is price discrimination?

A.   Charging different customers different prices for different goods

B.   Charging different customers the same price for the same good

C.   Charging different customers the same price for different goods

D.   Charging different customers different prices for the same good

19: Price discrimination requires ______.

A.   Low market power

B.   Knowing who has willingness to pay

C.   Ease in reselling discounted products

D.   Low elasticity of demand

20: If a monopoly’s fixed costs increase, its price will _____, and its profit will _____.

A.   Lower price = lower revenue

B.   Decreasing average total cost.

C.   Stay the same, decrease