The Producer Surplus to a Monopolist Must Be

question 145

Multiple Choice

The producer surplus to a monopolist must be

• A) less than zero or the firm is in violation of anti-trust statutes.
• B) at least as great as the producer surplus in a competitive market.
• C) positive, otherwise why would the monopoly produce?
• D) the same as for a competitive market.

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Definitions:

Barriers To Entry

Economic, procedural, regulatory, or technological factors that obstruct or restrict the ability of new competitors to enter and operate in a market.

Price Discrimination

A strategy where a provider sells identical or similar goods or services at varied prices in diverse markets.

Efficient Output

The level of production at which a firm or economy can produce goods at the lowest average cost, maximizing resource use without waste.

Market Price

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