The Higher Prices Charged by Monopolists

question 26

Multiple Choice

The higher prices charged by monopolists

• A) are like a private tax that redistributes income from consumers to monopoly sellers.
• B) are socially optimal because they better reflect how much society values the good relative to the resources used to produce it.
• C) return to consumers through the public goods provided by monopolies.
• D) have no effect on the distribution of income.

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Definitions:

Journal Entries

The basic way to record financial transactions in double-entry bookkeeping, involving debits and credits in accounting records.

Dividends

Disbursements issued by a company to its shareholders, typically originating from the firm's earnings.

Fair Value Through Profit or Loss

An accounting approach where financial assets are recorded at their fair value, with changes affecting the profit or loss statement directly.

Market Value

The current price at which an asset can be bought or sold in a public market.