Why Does a Monopoly Cause a Deadweight Loss

question 66

Multiple Choice

Why does a monopoly cause a deadweight loss?

• A)because it does not produce some output for which marginal benefit exceeds marginal cost
• B)because it appropriates a portion of consumer surplus for itself
• C)because it increases producer surplus at the expense of consumer surplus
• D)because it does not produce some output for which demand exceeds supply

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Definitions:

Muscle Spindle

A sensory receptor located within muscle, which detects changes in muscle length and tension.

Stretch Reflex

A muscle contraction in response to stretching within the muscle, functioning as a feedback mechanism to maintain muscle tone.

Golgi Tendon Organ

Proprioceptive nerve ending in a tendon.

Homeostatic

Relating to homeostasis, the process by which living organisms regulate their internal environment to maintain a stable, constant condition.