Pure Monopoly Trivia Quiz

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| By Laureennicole96
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Laureennicole96
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Questions: 5 | Attempts: 400

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A pure monopoly is a relatively rare market structure where one company is the single source for a product and there are no close alternatives for that product available elsewhere. What do you know about how pure monopolies work?


Questions and Answers
  • 1. 

    What is Pure Monopoly?

    • A.

      A board game.

    • B.

      An movie about economy.

    • C.

      When a company holds such a dominance in a market that no effective competition can take place.

    • D.

      All of the above.

    Correct Answer
    C. When a company holds such a dominance in a market that no effective competition can take place.
    Explanation
    The correct answer is "When a company holds such a dominance in a market that no effective competition can take place." This definition accurately describes pure monopoly, which occurs when a single company has complete control over a particular market or industry. In a pure monopoly, there are no other competitors, allowing the dominant company to set prices and control supply without any significant challenge from other firms. This lack of competition can result in higher prices, limited choices for consumers, and reduced innovation in the market.

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  • 2. 

    What are the characteristics of a Pure Monopoly?

    • A.

      Only one firm in the market (no competition).

    • B.

      Significant barriers to entry by other firms exist.

    • C.

      Lack of substitute goos for the monopolist's good.

    • D.

      Firm is a price-maker.

    • E.

      All of the above.

    Correct Answer
    E. All of the above.
    Explanation
    A pure monopoly is characterized by the presence of only one firm in the market, which means there is no competition. Additionally, there are significant barriers to entry by other firms, making it difficult for new players to enter the market. Furthermore, there is a lack of substitute goods for the monopolist's good, meaning consumers do not have alternative options. Lastly, the monopolist has the power to set the price for its product, making it a price-maker. Therefore, all of the given characteristics are true for a pure monopoly.

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  • 3. 

    A Pure Monopoly occurs when?

    • A.

      Someone looses a game.

    • B.

      When two people fight over an item in a store.

    • C.

      Another market competes to sell the same items as you, but can't compete.

    • D.

      All of the above.

    Correct Answer
    C. Another market competes to sell the same items as you, but can't compete.
    Explanation
    A pure monopoly occurs when another market competes to sell the same items as you, but can't compete. This means that there is only one seller in the market, with no close substitutes for their product or service. This lack of competition allows the monopolistic seller to have control over pricing and supply, giving them significant market power.

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  • 4. 

    Pure Monopoly causes the economy to fail.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Pure monopoly does not necessarily cause the economy to fail. While it can have negative effects such as higher prices and reduced competition, it can also lead to economies of scale, innovation, and technological advancements. Additionally, government regulations and antitrust laws can help mitigate the negative impacts of monopolies. Therefore, it is not accurate to say that pure monopoly always causes the economy to fail.

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  • 5. 

    There are laws to regulate Pure Monopoly.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because pure monopoly refers to a market structure where there is only one seller of a particular product or service with no close substitutes. In order to prevent the abuse of power and ensure fair competition, laws and regulations are put in place to regulate the behavior and practices of monopolies. These laws aim to protect consumers, promote efficiency, and prevent monopolies from engaging in anti-competitive practices such as price fixing or monopolistic behavior.

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