A monopoly misallocates resources when it

A. restricts output so that the marginal benefit of the last unit sold exceeds the marginal social cost of producing the good.
B. exploits scale economies.
C. makes an above-normal profit.
D. sells the same product to different groups of customers at different prices.


Answer: A

Economics

You might also like to view...

Compared to a similar perfectly competitive industry, a single-price monopoly

A) creates a deadweight loss and decreases economic profit. B) produces more output. C) creates a deadweight loss and decreases consumer surplus. D) is more efficient because there is no wasteful competition. E) sets a lower price because there is less competition.

Economics

In the simple accelerator model, if expected output declines,

A) gross investment becomes negative. B) net investment becomes negative. C) both gross investment and net investment become negative. D) the desired stock of capital will become negative.

Economics

One concern over external national debt is that interest and principal payments transfer wealth overseas. The percentage of the national debt held in recent years by foreigners is approximately:

a. 5 percent. b. 10 percent. c. 20 percent. d. 30 percent. e. 50 percent.

Economics

Which of the following is not a final good or service?

A. The salsa you use while watching football on the weekend. B. A notebook for your college courses C. A gallon of milk for your breakfast cereal D. The cheese on the pizza you bought from Domino's

Economics