If One Producer Has Control Over an Entire Market and Underproduces,the

question 111

Multiple Choice

If one producer has control over an entire market and underproduces,the producer will

• A) increase producer surplus by lowering pollution costs.
• B) increase consumer surplus by lowering producer surplus.
• C) increase both consumer and producer surplus.
• D) create a deadweight loss.
• E) decrease the deadweight loss that would exist if the market were efficient.

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Definitions:

Rival In Consumption

A characteristic of a good whereby one person's consumption reduces its availability for another person.

Externality

An externality is a consequence of an economic activity experienced by unrelated third parties; it can be either positive (beneficial) or negative (harmful).

Exotic Fish

Fish species that are not native to a specific location, often kept in aquariums or introduced to new environments where they can sometimes become invasive.

Common Resources

Natural or man-made resources that are not excludable but are rival in consumption, such as fish in the sea or public parks.