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:

Kinesthesis

The system for sensing the position and movement of individual body parts.

Basilar Membrane

A key structure in the cochlea of the inner ear that vibrates in response to sound, contributing to the process of hearing.

Cochlea

A coiled, bony, fluid-filled tube in the inner ear through which sound waves trigger nerve impulses.

Eardrum Vibrations

The movements of the eardrum in response to sound waves, crucial for the process of hearing by transmitting vibrations to the inner ear.