A Monopoly Is an Inefficient Way to Produce a Product

question 203

Multiple Choice

A monopoly is an inefficient way to produce a product because

• A)it can earn both short-run and long-run profits.
• B)it faces a downward-sloping demand curve.
• C)the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers.
• D)it produces a smaller level of output than would be produced in a competitive market.

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Definitions:

Association

A statistical relationship between two or more variables, which does not necessarily imply a cause-and-effect relationship.

Audition

A trial performance by an actor, singer, musician, or dancer to demonstrate suitability for a role, part, or position.

Prospective Cohort

A research study that follows a group of individuals over time to determine how their exposures affect their outcomes.

Retrospective Cohort

A study that looks back at a group of individuals who share a common characteristic or experience over a certain period to assess the effect of certain variables on outcomes.