In comparison to perfect competition, monopoly price-quantity combinations generate
A. a producer surplus that is smaller.
B. a reduction in deadweight loss.
C. a consumer surplus that is larger.
D. total revenue to the producer that is larger.
Answer: D
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What is the relationship between the marginal social benefit of milk and marginal social cost of milk when the efficient quantity of milk is produced?
What will be an ideal response?
In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device,
A) the high-skill workers' wage is larger than the low-skill workers' wage. B) the low-skill workers' wage is zero. C) the high- and low-skill workers receive the same wage. D) the high-skill workers' wage is equal to the low-skill workers' wage plus the cost of obtaining a degree.
Domestic aggregate surplus:
A. is the sum of consumer surplus, deadweight loss and government revenue. B. is the sum of domestic producer surplus and government revenue. C. is the sum of domestic producer surplus and consumer surplus. D. is the sum of consumer surplus, domestic producer surplus and government revenue.
Suppose a local union has a contract that calls for the nominal wage to increase by 5 percent plus 100 percent of any increase in the CPI. If the CPI increases by 4% and there is a 1% positive bias in the inflation rate, by how much would nominal wages unnecessarily increase?
a. 9 percent b. 1 percent c. 5 percent d. 3 percent e. 4 percent