Because a monopoly will produce less of a good than a competitive market will, welfare is always greater under monopoly than under competition in the presence of a negative externality
Indicate whether the statement is true or false
False. If monopoly produces more than the social optimum, then it does generate greater welfare than competition. If monopoly produces less than the social optimum, then it may or may not generate greater welfare.
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How would you feel about a policy that would raise someone else's income without lowering yours? Are you any worse off?
What will be an ideal response?
Which of the following examples best illustrates the concept of derived demand?
A) An increase in the price of beef results in an increase in the demand for fish. B) The higher the demand for automobiles, the greater the demand for steel. C) The demand for Pepsi varies directly with the price of Coke. D) The demand for a good varies inversely with its price.
Use the above figure. The profit-maximizing price will be
A) P1. B) P2. C) P3. D) P4.
The focus of the short-run macro model is on the role of
a. spending in explaining economic fluctuations b. labor in explaining economic fluctuations c. financial markets in explaining economic fluctuations d. output in explaining economic fluctuations e. resources in explaining economic fluctuations.