What does the deadweight loss of monopoly measure?
What will be an ideal response?
It measures the inefficiency associated with monopoly because the level of production is lowered. Since fewer units are produced there is a loss of both consumer and producer surplus for those units; this is known as a loss in market surplus.
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An inflationary gap will eliminate itself through a process of price increases
a. True b. False Indicate whether the statement is true or false
What is the total welfare from trade as shown in Exhibit 2?
a. + a
b. + d
c. a + b + c + e + f
d. a + b + c + d + e + f
Dividends are
A. bonuses given to managers of corporations, to ensure that the managers perform in the way that stockholders want. B. taxes on the profits of corporations. C. the portion of a corporation's profits that are distributed to stockholders. D. the portion of a corporation's revenues that are distributed to bondholders.
A firm advertising using an expensive, famous spokesperson is often
A) aimed to raise rivals' costs. B) used to increase the total market demand. C) used to steal customers from rivals. D) used to focus on general problems the product addresses.