Why Does a Monopoly Cause a Deadweight Loss

question 66

Multiple Choice

Why does a monopoly cause a deadweight loss?

• A)because it does not produce some output for which marginal benefit exceeds marginal cost
• B)because it appropriates a portion of consumer surplus for itself
• C)because it increases producer surplus at the expense of consumer surplus
• D)because it does not produce some output for which demand exceeds supply

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Definitions:

Additive

A substance added to something in small quantities to improve or preserve it. In another context, it refers to a process or principle involving the addition of elements or quantities.

Subtractive

A process or method that involves removing elements or aspects to simplify or reduce complexity.

Opponent Processes

A theory initially applied to color vision, suggesting that the perception of color is controlled by the activity of two opposing processes.

Additive Colour Mixing

The process of mixing different colors of light, where combining various lights can create a broad spectrum of colors.