Which Is a Major Criticism of a Monopoly as a Source

question 394

Multiple Choice

Which is a major criticism of a monopoly as a source of allocative inefficiency?

• A)A monopolist fails to expand output to the level where the consumers' valuation of an additional unit is just equal to its opportunity cost.
• B)A monopolist has no incentive to produce efficiently, because even the inefficient monopolist can be assured of economic profits.
• C)A monopolist will always earn profits, and that means that prices are too high.
• D)A monopolist has an unfair advantage because it can purchase labor at a lower price than competitive firms can.

Learn the decision-making process and responsibilities within a nonprofit organization regarding entering business partnerships.

Acknowledge the importance of feasibility studies in the development of nonprofit business ventures.

Understand the myths of color-blindness and meritocracy in American society and their social and policy implications.

Analyze racial projects at both macro and micro levels, including policy debates and their effects on social structures.

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Definitions:

Stereotyping

The act of assigning generalized characteristics or behaviors to all members of a group, based on preconceived notions or simplistic generalizations.

Perceptual Distortion

A psychological phenomenon where an individual's perception of reality is inaccurately perceived due to cognitive biases or environmental factors.

Oversimplified Attributes

Characteristics or features of an object or situation described in a manner too simplistic, ignoring complexity or nuances.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when judging others' behavior.