A Monopoly Exhibits Resource-Allocative Efficiency If It

question 28

Multiple Choice

A monopoly exhibits resource-allocative efficiency if it

• A)is a single-price monopolist.
• B)is a perfectly price-discriminating monopolist.
• C)engages in second-degree price discrimination.
• D)engages in third-degree price discrimination.
• E)all of the above

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Definitions:

Unregulated Market

A market operating without governmental rules or oversight wherein the forces of supply and demand are unimpeded by outside control.

Price Controls

Regulatory measures by which a government seeks to control the price of goods and services, either by setting maximum prices (price ceilings) or minimum prices (price floors).

Natural Gas

A fossil fuel composed primarily of methane, used as a source of energy for heating, cooking, and electricity generation.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.