Which of the Following Can Eliminate the Inefficiency Inherent in Monopoly

question 279

Multiple Choice

Which of the following can eliminate the inefficiency inherent in monopoly pricing?

• A)arbitrage
• B)cost-plus pricing
• C)price discrimination
• D)regulations that force monopolies to reduce their levels of output

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Definitions:

Marginal Benefit

The supplementary enjoyment or advantage gained by consuming another unit of a good or service.

Marginal Social Benefit

The additional benefit received by society as a whole from the production or consumption of one more unit of a good.

Marginal Social Benefit

The additional gain to society as a whole from an additional unit of a good or service, considering both private benefits and externalities.

Marginal Benefit Curve

The Marginal Benefit Curve is a graphical representation showing how the benefit or utility from consuming each additional unit of a good decreases as more units are consumed.