The above figure shows the market for a given product. Defining welfare as consumer surplus plus producer surplus, calculate the social welfare associated with perfect competition, single-price monopoly, and a perfect-price-discriminating monopoly
Which market structure(s) maximize social welfare?
Social welfare equals
Perfect competition: A + B + C + D + E
Single-price monopoly: A + B + D
Perfect-price-discriminating monopoly: A + B + C + D + E
Social welfare is greatest under either perfect competition or perfect price discrimination.
You might also like to view...
Using Figure 1 below, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2.
B. P3 and Y2.
C. P2 and Y1.
D. P3 and Y1.
The monetary base is also known as:
A. M1. B. M2. C. free reserves. D. high-powered money.
Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity?
A. A decrease in demand B. A decrease in supply C. An increase in demand D. An increase in supply
Bank panics were the result of
A. banks holding 100% of their deposits on reserve. B. depositors attempting to withdraw more deposits than the banks held in reserve. C. banks hoarding greenbacks during the Civil War. D. the United States going off the gold standard in 1933.