If One Were to Compare a Competitive Market to a Monopoly

question 208

Multiple Choice

If one were to compare a competitive market to a monopoly that engages in perfect price discrimination,what could one say

• A)In both cases, total social welfare is the same.
• B)Total social welfare is maximized in the competitive market, but not in the perfectly discriminating monopoly.
• C)In both cases, some potentially mutually beneficial trades do not occur.
• D)Consumer surplus is the same in both cases.

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Definitions:

Available-for-sale

A classification of financial assets indicating they can be sold in the future, not held to maturity or for trading immediately.

Derecognition

The removal of an asset or liability from a company's balance sheet when it is no longer controlled or owes it.

Financial Assets

Assets that are cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset, or a contract that will or may be settled in the entity's own equity instruments.

AASB 101

The Australian Accounting Standards Board statement that outlines the presentation of financial statements.