If One of the Agents in an Edgeworth Box Has

question 57

Multiple Choice

If one of the agents in an Edgeworth Box has monopoly power and maximizes profit as the sole seller, then the economic outcome is:

• A) inefficient because the monopoly has no incentive to be technically efficient.
• B) inefficient because the monopoly produces less than the optimal amount of output.
• C) Both A and B are correct.
• D) none of the above

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Definitions:

Miles

Units of distance measuring 5,280 feet, or approximately 1.609 kilometers, commonly used in the United States.

Dimensional-analysis

A mathematical technique used to convert one set of units to another, facilitating computations and solving problems.

Centimeters

A unit of length in the metric system, equivalent to one hundredth of a meter.

Inches

A unit of length in the imperial and US customary systems, equivalent to 1/12th of a foot.