Which of the Following Is an Argument in Favor of a Competitive

question 103

Multiple Choice

Which of the following is an argument in favor of a competitive market structure rather than monopoly?

• A)Monopolies have greater ability to pursue research and design.
• B)The lure of monopoly power provides a greater incentive for invention and innovation.
• C)Monopolies produce less at a higher price than competitive markets,ceteris paribus.

---

Definitions:

Rent

A periodic payment made by a tenant to a landlord for the use of land, premises, or other property.

Surplus

An excess of income or assets over expenditure in a given period, often referring to a government's budget.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price over a specific period.

Quantity Demanded

The amount of a good or service consumers are willing and able to buy at a specific price level, ceteris paribus.