DP Economics Questionbank

State two assumed characteristics of a monopoly.

Examine the role of barriers to entry in making monopoly a less desirable market structure than perfect competition.

Discuss the view that governments should always try to prevent the creation of barriers to entry in a market.

On the following axes, sketch a fully labelled diagram showing the level of output Q’ for which the relationship
P = AR > MR > AC > MC is true. The use of figures provided in Table 1 is not required.

Explain why a profit-maximizing monopolist would never choose to operate on the inelastic portion of its demand curve.

Using the diagram and your answers to parts (j) and (k), explain how the organizers could achieve their goal of profit maximisation.

Discuss the view that barriers to entry in a monopoly will always lead to abnormal profits in the long run.

Using Figure 3, calculate the economic profit when Firm B is maximizing its profits.

On the following axes, sketch a fully labelled diagram showing the level of output Q’ for which the relationship
P = AR > MR > AC > MC is true. The use of figures provided in Table 1 is not required.

Using a theory of the firm diagram, explain the output and pricing decision of M-Kopa if it chooses to pursue the goal of revenue maximization (paragraph [6]).

Using Figure 3, calculate the total revenue when Firm B is maximizing its revenue.

Explain how a natural monopoly may arise.

Evaluate the view that monopoly is an undesirable market structure as it fails to achieve productive and allocative efficiency.

Explain two reasons why a monopoly may be considered desirable for an economy.

Discuss the view that legislation is the best way of dealing with the problem of monopoly power.

Discuss how governments restrict monopoly power.

Discuss the view that governments should always try to prevent the creation of barriers to entry in a market.

Discuss the view that perfect competition is a more desirable market structure than monopoly.

Discuss whether price will always be lower and output will always be higher in perfect competition compared to monopoly.

Evaluate the view that monopoly is an undesirable market structure as it fails to achieve productive and allocative efficiency.

Examine the role of barriers to entry in making monopoly a less desirable market structure than perfect competition.

Discuss the consequences of a perfectly competitive market becoming a monopoly market.