Adam Matsumi is an attorney who can charge legal fees above the competitive level because entry of new competitors is made more difficult by the need to hold a(n)
a. state license
b. patent
c. essential resource
d. economy of scale
e. copyright
QUESTION 2If an industry currently has a Herfindahl index of 900 and a merger would raise that to 950, then the Department of Justice would generally
a. challenge the merger because the index would become too large
b. challenge the merger because the change in the index is too large
c. not challenge the merger because the postmerger index is less than 1,800
d. not challenge the merger if it is a horizontal merger
e. challenge the merger if it is a vertical merger
QUESTION 3If a market is productively efficient,
a. the output is being produced at the lowest possible resource cost
b. the output is selling for the lowest possible price
c. economic profit in the market is positive
d. the output being produced is what consumers want
e. no firm can earn a normal profit
QUESTION 4When a monopolist practices perfect price discrimination,
a. consumers receive no consumer surplus
b. there is allocative inefficiency
c. there is a deadweight loss
d. profit is lower than for the nondiscriminating monopolist
e. total revenue is less than for the nondiscriminating monopolist
QUESTION 5The largest value the Herfindahl index can have is
a. 100, which would indicate a monopoly
b. 100 for firms equal in size
c. 100,000
d. 10,000 . which would indicate a pure monopoly
e. infinity
QUESTION 6Firms achieve productive efficiency in the long run by
a. striving to minimize fixed cost
b. striving to maximize revenue
c. producing at their minimum long-run average cost
d. producing at their minimum long-run marginal cost
e. producing the output consumers want most
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