Suppose a Certain Good Conveys Either an External Cost or an External

question 8

True/False

Suppose a certain good conveys either an external cost or an external benefit. If the private cost of the last unit of the good that was produced is equal to the private value of that unit, then the sum of producer and consumer surplus is maximized.

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Definitions:

Price Conspiracy

An illegal agreement among competitors to fix prices, control market production, or divide markets to eliminate competition and harm consumers.

Monopoly Market

A market structure characterized by a single seller offering a unique product or service with no close substitutes.

Herfindahl-Hirschman Index

An indicator used to assess the degree of market concentration and establish the intensity of industry competition.

Oligopolist

A market participant in an oligopoly, a market structure dominated by a small number of large firms, influencing pricing and competition.