Which of the following statements is correct?
a. The benefits that accrue to a monopoly's owners are equal to the costs that are incurred by consumers of that firm's product.
b. The deadweight loss that arises in monopoly stems from the fact that the profit-maximizing monopoly firm produces a quantity of output that exceeds the socially-efficient quantity.
c. The deadweight loss caused by monopoly is similar to the deadweight loss caused by a tax on a product.
d. The primary social problem caused by monopoly is monopoly profit.
c
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When the profits of firms that produce import-competing goods and services fall, these firms ________ their workforce, unemployment in these industries ________, and wages ________
A) cut; decreases; rise B) cut; decreases; fall C) cut; increases; fall D) expand; increases; rise E) cut; increases; rise
A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. If the firm sells each computer for $625, then how many hours a day should the firm employ Pam to maximize its net benefit from her employment?
A. 1 hour B. 3 hours C. 4 hours D. 2 hours
One risk of targeting inflation at zero is that ______.
a. it may damage the credibility of the central bank b. deflation may be prevented c. investment spending may reach unsustainable levels d. interest rates may fall too low
If a $50 billion initial increase in spending leads to a $250 billion change in real GDP, how big is the multiplier?
What will be an ideal response?