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Economics for Today 9th Edition by Irvin Tucker
Edition 9ISBN: 978-1305507111Economics for Today 9th Edition by Irvin Tucker
Edition 9ISBN: 978-1305507111 Exercise 29
Monopolies are inefficient resource allocators compared to a competitive market because which of the following is true ?
A) A monopolist sets its output at a point where price (the marginal benefit to society) exceeds marginal cost of production. Thus increasing output toward the competitive level will increase efficiency (net social benefits).
B) Monopolies overallocate resources to the production of its product.
C) Monopolies are compelled to produce more than a set of competitive firms serving the same market.
D) Both answers b and c above are correct.
A) A monopolist sets its output at a point where price (the marginal benefit to society) exceeds marginal cost of production. Thus increasing output toward the competitive level will increase efficiency (net social benefits).
B) Monopolies overallocate resources to the production of its product.
C) Monopolies are compelled to produce more than a set of competitive firms serving the same market.
D) Both answers b and c above are correct.
Explanation
Verified
Verified
However, in case of monopoly, price exce...
Economics for Today 9th Edition by Irvin Tucker
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