For a Monopoly, the Socially Efficient Level of Output Occurs

question 20

Multiple Choice

For a monopoly, the socially efficient level of output occurs where

• A)marginal revenue equals marginal cost.
• B)average revenue equals marginal cost.
• C)marginal revenue equals average total cost.
• D)average revenue equals average total cost.

---

Definitions:

Required Reserve Ratio

The fraction of deposits that banks are required by law to keep on hand or with the central bank as a reserve.

M1 Money Supply

A category of money supply that includes all physical money like coins and currency, as well as demand deposits and other liquid assets held by the central bank.

Fed

The Federal Reserve System, often referred to as the Fed, is the central banking system of the United States, which oversees the nation's monetary policy by regulating banking institutions, stabilizing the financial system, and managing inflation and employment levels.

Checkable Deposits

Bank account balances that can be withdrawn using checks or electronic debit, typically found in checking accounts.