A Monopoly Is an Inefficient Way to Produce a Product

question 203

Multiple Choice

A monopoly is an inefficient way to produce a product because

• A)it can earn both short-run and long-run profits.
• B)it faces a downward-sloping demand curve.
• C)the cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers.
• D)it produces a smaller level of output than would be produced in a competitive market.

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Definitions:

Ethical

Pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.

Self-Serving Bias

The common tendency to attribute one's successes to personal factors and one's failures to external factors.

Unrealistically High

Describes expectations or standards that are excessively beyond what is achievable or reasonable.

Aggressively

In a manner that is forceful, energetic, or determined, often aiming to dominate or assert oneself.