A Monopoly

question 158

Multiple Choice

A monopoly:

• A) takes the market price as given.
• B) determines its own price, given its demand curve.
• C) achieves nearly the same resource allocation efficiency as perfect competition, because it competes in the general marketplace for dollars.
• D) is characterized by A and B.

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Definitions:

Total Welfare

The total economic well-being that a society achieves, including both consumer surplus and producer surplus.

Consumer Surplus

The contrast between what consumers intend to spend on a good or service and the actual amount they part with.

Producer Surplus

The difference between how much producers are willing to accept for a good versus how much they actually receive.

Price Support

Price set by government above free-market level and maintained by governmental purchases of excess supply.