Deadweight Loss Results in a Monopoly Because

question 179

Multiple Choice

Deadweight loss results in a monopoly because:

• A) the monopolist charges a price equal to marginal cost, which is higher than the price charged in a competitive market.
• B) the monopolist produces a quantity that is higher than the quantity produced in a competitive market.
• C) the monopolist makes a positive economic profit in the short run.
• D) the monopolist charges a price below marginal cost.
• E) some consumers who would benefit from a competitive market lose out.

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Definitions:

Conditioned Response (CR)

The learned response to the conditioned stimulus that occurs after a conditioned stimulus–unconditioned stimulus pairing.

Conditioned Stimulus (CS)

A previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Response (UR)

An unlearned reaction that is automatically elicited by the unconditioned stimulus.

Unconditioned Stimulus (US)

An unconditioned stimulus is any stimulus that naturally triggers a reflexive response without the need for prior learning.