Why Does a Monopoly Cause a Deadweight Loss

question 37

Multiple Choice

Why does a monopoly cause a deadweight loss?

• A)because it stops producing output at a point where price is above 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:

Defense Mechanisms

Psychological strategies brought into play by individuals to cope with reality and maintain self-image.

Parental Influence

The effect that parents have on the development of their children’s attitudes, behaviors, and values.

Peer Influence

The impact that the attitudes, behaviors, and norms of an individual's peer group have on their own behavior and attitudes.

Stereotypes

Overgeneralized beliefs about a particular category of people, assuming that all members of that group share the same characteristics, often leading to unfair judgments and discrimination.