Which of the following explains why monopolists lack allocative efficiency?
a. Because they produce at the quantity where P = MC
b. Because they produce at the quantity where P > MC
c. Because they invest too much in research and development
d. Because they use intellectual property as barriers to entry
b. Because they produce at the quantity where P > MC
You might also like to view...
A do-it-yourself approach to production is more likely when
a. technology is complex b. inputs are difficult to identify c. resources cannot easily be measured d. the price of inputs is known e. contracts are complex
If a firm refuses to hire any minorities due to a personal prejudice, its profits will
a. not be affected. b. increase slightly. c. increase markedly. d. decrease.
Total fixed cost is
A) the cost of buying and installing new machinery. B) the cost that does not change as output changes. C) the expenditure on imported raw materials. D) the wages paid to consultants.
If the benefit of a public good is small to each individual in a society of millions of individuals:
A. it cannot really be a public good since the benefit of public goods is always large. B. the total benefit will be small since individuals cannot share the benefits of public goods. C. it will never be efficient for government to provide the public good. D. the total benefit will be large since social benefit is the sum of all individual benefits.