Monopolists are said to be allocatively inefficient because:
A. at the profit-maximizing output, the marginal benefit to society from increasing output is greater than the marginal cost to society.
B. they produce where MR > MC.
C. they produce only the type of product they desire and do not consider the consumer.
D. at the profit-maximizing output, price is greater than AVC.
Answer: A
You might also like to view...
Suppose Sarah owns a small company that makes wedding cakes. The table below shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day.Number ofCakes Per DayTotal CostPer Day0$1001$1802$2203$3004$4005$5206$660If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $125 each, then at her profit-maximizing level of output, Sarah's profit will be ________ per day.
A. $90 B. $625 C. $105 D. $100
Suppose the measured unemployment rate is 3.9% and the natural rate of unemployment is 5.1%. In this situation, policymakers should
A) attempt to stimulate the economy. B) attempt to slow the economy. C) not intervene in the economy. D) The actions of policymakers will depend on how much of the natural rate is frictional unemployment and how much is structural unemployment.
Income inequality in the United States has increased in part due to differences in productivity
A more productive worker is likely to be paid ________ than a less productive worker doing the same job, and the worker who adds more value to the product being produced is likely to be paid ________ than the worker who does not add as much value to production. A) more; more B) more; less C) less; more D) less; less
The items included in the CPI are
A) final goods produced in the United States. B) final goods and services produced in the United States. C) goods and services consumed by the typical urban household. D) only goods and services produced within the current year and consumed by the typical household. E) goods but not services consumed by the typical urban household.