To Maintain a Monopoly, a Firm Must Have

question 107

Multiple Choice

To maintain a monopoly, a firm must have

• A)a perfectly inelastic demand.
• B)an insurmountable barrier to entry.
• C)marginal revenue equal to demand.
• D)few competitors.

Understand the mechanisms of rationing in an economy and the role of price as a rationing criterion.

Identify goods that are not considered scarce and understand exceptions to the scarcity principle.

Understand the impact of international trade on domestic market prices and quantities.

Identify the effects of tariffs and quotas on domestic economies and global trade.

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Definitions:

Licensing

A business arrangement in which one party allows another to use its brand, patent, or intellectual property in exchange for a fee or royalty.

Product Association

The connection or linkage of a product with certain qualities, emotions, or concepts in the minds of consumers.

Allowable Franchising

A franchising arrangement wherein the franchisor grants the franchisee the rights to operate under the brand's trade name within specific, agreed-upon terms and limitations.

Look-Alike Packaging

Packaging that closely mimics the appearance of a well-known brand's product packaging to attract consumers.