Which of the Following Statements Comparing Monopoly with Competition Is

question 37

Multiple Choice

Which of the following statements comparing monopoly with competition is correct?

• A)A monopolist produces a higher level of output and charges a lower price than a competitive firm would.
• B)With perfect price discrimination, the total surplus under monopoly can be the same as under competition.
• C)With or without price discrimination, the consumer surplus under monopoly is at least as large as it would be under competition.
• D)The deadweight loss associated with monopoly is caused by the positive economic profits of the monopolist; competitive firms do not earn a positive economic profit so there is no deadweight loss under competition.

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Definitions:

Refurbishment

The process of cleaning, decorating, and re-equipping to make something look new or to restore it to good condition.

Revenue Variance

The difference between a company's actual revenue and its budgeted or projected revenue over a given period.

Budgeting

The process of creating a plan to spend your money, which involves estimating revenues and expenses over a specified future period.

Fixed Costs

Costs that do not change with the level of output or sales in the short term.