A Monopoly Might Produce Less Than the Socially Optimal Amount

question 51

Multiple Choice

A monopoly might produce less than the socially optimal amount of pollution because

• A) it likes to be a good citizen.
• B) it sets price above marginal cost.
• C) it earns economic profit.
• D) it internalizes the external costs.

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Definitions:

Income

The financial gain received by an individual or entity, typically through wages, investments, or business operations.

Price

The fiscal amount presumed, asked for, or remunerated in return for an item.

Apples

A type of fruit that grows on apple trees, known for its sweet taste and the wide variety of types available.

Utility Function

A mathematical representation of how a consumer derives satisfaction or utility from consuming goods and services.