Rent Seeking

question 24

Multiple Choice

Rent seeking

• A)is a variable cost and with rent seeking the monopoly becomes more efficient.
• B)decreases average total cost and with rent seeking the monopoly becomes more efficient.
• C)increases deadweight loss above the original monopoly deadweight loss,but the monopoly continues to produce the same inefficient quantity.
• D)decreases consumer surplus and with rent seeking the monopoly becomes more efficient.
• E)decreases deadweight loss.

---

Definitions:

Markup On Total Cost

A pricing strategy where a fixed percentage is added to the total cost of a product to determine its selling price.

Variable Product Cost

Costs that vary directly with the volume of production, such as raw materials and direct labor costs.

Operating Income

The profitability from a company's core business operations, excluding deductions of interest and taxes.

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.