The loss to society caused by monopoly power may be greater than simply the losses associated with deadweight losses because it also includes losses due to

Question

Quizplus · Accepted Answer

Monopoly power not only leads to deadweight losses but also creates barriers to entry into the market, which can hinder competition and lead to further inefficiencies. Such barriers can be created by private actors, such as through exclusive contracts or control of key resources, or by the government through regulations or patents. In addition, extensive product differentiation and occupational licensing can also reduce competition and create inefficiencies in the market. Therefore, the best choice is E, as all of the above factors can contribute to the losses associated with monopoly power.

The Loss to Society Caused by Monopoly Power May Be