From the Viewpoint of Allocative Efficiency, Which of the Following

question 64

Multiple Choice

From the viewpoint of allocative efficiency, which of the following is a defect of pure monopoly?

• A) The monopolist undersupplies the market and charges too high a price.
• B) The monopolist is a revenue maximizer not a profit maximizer.
• C) A monopolist has little incentive to produce efficiently (at a low cost).
• D) All of the above are true.

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Definitions:

Easement

An irrevocable right to use some part of another’s land for a specific purpose, without taking anything from it.

License

A license is a legal permission granted by a competent authority to engage in an activity or to use a certain type of property that would otherwise be forbidden.

Financing

The act of providing funds for business activities, purchases, or investments, typically involving loans, equity investments, or other financial instruments.

Financial Institution

An establishment that focuses on dealing with financial transactions, such as investments, loans, and deposits.