Introduction to Economics 1 Deneme Sınavı Sorusu #1131775
Which of the following is true regarding monopoly?
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A monopoly produces the socially efficient quantity of output. |
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A monopoly charges a price above the marginal cost. |
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Monopoly never creates a deadweight loss. |
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Economic surplus when there is a monopoly is higher compared to economic surplus that can be achieved when there is perfect competition. |
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The benefits to the firm exceed the loss in consumer surplus, making monopoly desirable from the standpoint of society as a whole. |
A monopoly, in contrast to a competitive firm, charges a price above the marginal cost. The high price is undesirable for consumers since it reduces their consumer surplus. Compared to a perfectly competitive market, a monopoly produces less than the socially efficient quantity of output and charges a relatively higher price, hence creates a deadweight loss.
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