An Inefficient Market Is One in Which Prices Do Not

question 38

True/False

An inefficient market is one in which prices do not reflect all available information.

Examine the effects of changes in market conditions (like annexation or invention of new products) on monopoly behavior.

Understand the effect of fixed costs and marginal costs on the production decisions of a monopolist.

Understand the concept of Pareto improvement and social efficiency in monopoly markets.

Predict the outcomes in markets with unique products or demands, like zwiffle or slops.

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Definitions:

Income Distribution

The way in which total income is shared amongst the members of a society or an economy.

Pre-Tax-And Transfer Income

Income before any taxes are deducted or any government assistance or welfare payments are added.

Poverty Rate

The percentage of the population living below the poverty line, where the poverty line is the minimum level of income deemed adequate in a specific country.

Income Range

The spread between the lowest and highest income levels within a given group.