When a Monopoly Maximizes Profit,the Loss of Surplus by Consumers

question 245

Multiple Choice

When a monopoly maximizes profit,the loss of surplus by consumers is _____ the monopolist's gain in profit.

• A)less than
• B)equal to
• C)more than
• D)sometimes more than and sometimes less than

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Definitions:

Asset

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

American Option

Call or put option that can be exercised on or before the expiration date.

European Option

A type of options contract that allows the holder to exercise the option only on its expiration date.

Underlying Asset

An asset on which a derivative instrument, such as an option or futures contract, is based, determining its value and performance.