Assume a Hypothetical Case Where an Industry Begins as Perfectly

question 131

Multiple Choice

Assume a hypothetical case where an industry begins as perfectly competitive and then becomes a monopoly.Which of the following statements regarding economic surplus in each market structure is true?

• A)Under perfectly competitive conditions, economic surplus in this industry equals consumer surplus plus producer surplus. Under monopoly conditions, some consumer surplus is transferred to producer surplus, but economic surplus is the same as it was under perfectly competitive conditions.
• B)Under perfectly competitive conditions, economic surplus in this industry is maximized. Under monopoly conditions, economic surplus is minimized.
• C)Under perfectly competitive conditions, economic surplus is equal to consumer surplus; there is no producer surplus because firms are price takers. Under monopoly conditions, economic surplus is equal to producer surplus.
• D)Under perfectly competitive conditions, economic surplus is maximized. Under monopoly conditions, economic surplus is less than under perfect competition and there is a deadweight loss.

Compare and contrast different theories relating to crowd behavior, specifically emergent norm theory, contagion theory, and convergence theory.

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Definitions:

Support Department

A division within a company that provides essential services or backup to the production or operations departments, not directly producing goods or services.

Cost Accounting

A type of accounting focused on capturing a company's total cost of production by assessing its variable and fixed costs.

Raw Materials

Basic materials and substances used in the initial stages of the production process to manufacture goods.

Support Department

A division within a company that provides essential services or support to the main production or operational departments but does not directly contribute to profit.