Monitoring a Monopoly to Keep It Efficient Would Itself Be

question 72

Multiple Choice

Monitoring a monopoly to keep it efficient would itself be efficient if the extra profit achieved by:

• A) raising production costs is less than the costs of monitoring.
• B) raising production costs exceeds the costs of monitoring.
• C) reducing production costs is less than the costs of monitoring.
• D) reducing production costs exceeds the costs of monitoring.

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Definitions:

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Income

The amount of money received over a period of time, either as payment for work, goods, or services, or as profit on investment.

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The combination of goods and services that maximizes a consumer's utility for a given level of income and prices.

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