Production by a Monopoly Would Result in the Socially Optimal

question 51

Multiple Choice

Production by a monopoly would result in the socially optimal allocation of resources if

• A)price is set equal to marginal cost
• B)marginal revenue is set equal to price
• C)marginal revenue is set equal to marginal cost
• D)price is set equal to average total cost
• E)marginal revenue is set equal to average total cost

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Definitions:

Short Run

In economics, the short run is a period during which at least one input, such as factory size or machinery, is fixed and cannot be changed.

Long Run

A period of time in which all factors in a production process can be varied, allowing for the adjustment to changes in market or economic conditions.

Economic Power

The ability of an entity or country to influence or control economic activities, including production, trade, and consumption.

Political Power

Political power is the capacity or ability of a political entity, such as a state or government, to control or influence the behavior of individuals and organizations within a society.