The Deadweight Loss Arising from the Monopolization of a Perfectly

question 174

Multiple Choice

The deadweight loss arising from the monopolization of a perfectly competitive industry is:

• A)the transfer of consumer's surplus to the monopolist in the form of economic profit.
• B)the reduction in quantity supplied and the increase in product price.
• C)the gain in producer's surplus minus the loss in consumer's surplus.
• D)the net reduction in both consumer's and producer's surplus which is not captured by anyone.

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Definitions:

Short Run

A period in economics during which the quantities of some inputs cannot be changed, limiting the capacity to adjust production levels.

Step-Variable Cost

Refers to a cost that remains fixed for a certain level of production or activity, but can increase in a step manner when a certain threshold is exceeded.

Activity

The actions undertaken by an individual or organization, often relating to business operations or project management.

Variable Cost Per Unit

The cost that changes in proportion with the production volume or activity level.