When a Firm Has a Monopoly in a Market and Also

question 36

Multiple Choice

When a firm has a monopoly in a market and also perfectly price discriminates,total welfare

• A) is maximized.
• B) is lower than in a perfectly competitive market.
• C) is higher than in a perfectly competitive market.
• D) is minimized.

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Definitions:

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among entities, determining who ultimately bears the cost of the tax.

Burden

The load, duty, responsibility, or stress placed upon an individual or entity.

Distribution of Income

The way in which a nation’s total earnings are divided among its population, or the way in which wealth is shared amongst individuals.

Evade

To avoid or escape from something or someone, often by using cunning or deceit.