This Graph Shows the Cost and Revenue Curves Faced by a Monopoly

question 59

Multiple Choice

This graph shows the cost and revenue curves faced by a monopoly.
According to the graph,if the perfectly competitive outcome and monopoly outcome are compared,we can see that:

• A)the monopoly creates deadweight loss.
• B)the perfectly competitive firm would lose money in this industry.
• C)the perfectly competitive firm would produce Q1 units.
• D)the monopolist would charge P3 and the perfectly competitive firm would charge P1.

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Definitions:

Division of Labor

The separation of tasks in any economic system or organization so that participants may specialize, increasing efficiency and productivity.

Flatter Span

A management structure with fewer levels of hierarchy and a broader span of control, allowing for more direct communication and less formal supervision.

Decentralization

The distribution of decision-making power and authority from a central figure or location to multiple smaller units or levels within an organizational hierarchy.

Specialized Jobs

Positions that focus on specific tasks or responsibilities, requiring particular skills or training.