Which of the Following Markets Will Have the Largest Deadweight

question 381

Multiple Choice

Which of the following markets will have the largest deadweight loss?

• A) A market that consists of perfectly competitive firms.
• B) A market that consists of a single-price monopoly.
• C) A market that consists of a perfect price discriminating monopoly.
• D) None of the above. There is no deadweight loss as long as firms produce at the level of output where marginal revenue equals marginal cost.

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Definitions:

Point System

A method of performance evaluation or employee recognition where individuals earn points for various achievements, which can be exchanged for rewards.

Job-Evaluation Technique

A systematic process for determining the relative worth of a job in comparison to other jobs within an organization, usually considering factors like skill, effort, and responsibility.

Compensable Factors

Characteristics of jobs that are valued by the employer and are compensated for in the form of wages, salaries, or benefits.

Stock-Option Plan

a compensation scheme that gives employees the option to buy company shares at a predetermined price, usually as an incentive or reward.