Quick Quiz – Questions

1. How many producers are there in a monopoly market structure?

2. Do monopolies generally charge more or less than perfectly competitive markets?

3. Monopolies are price setters – what does this mean?

4. Define the term economies of scale

5. How can monopolies lead to efficiency gains in the market?

6. What type of profit is earned by monopolists?

7. Why are monopolies viewed as market failure?

8. What is reduced in a monopoly – consumer or producer surplus?

9. What is an advantage of having government regulation of monopolies?

10. What is the argument for monopolies increasing research and development and innovation?

11. Why are supernormal profits a bad thing?

12. State at least two disadvantages of monopolies for consumers