The Profit-Maximizing Output of a Pure Monopoly Is Not Socially

question 21

Multiple Choice

The profit-maximizing output of a pure monopoly is not socially optimal, because in equilibrium

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

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Definitions:

Identical Elements

A learning theory principle suggesting that transfer of learning occurs when the learning and application situations share the same elements.

Underlying Principles

Fundamental concepts or assumptions that form the basis for a system, theory, or policy.

External Locus

A belief that one's successes or failures result from external factors beyond their control.

Cognitive Ability

The capacity to perform higher mental processes of reasoning, remembering, understanding, and problem-solving.