Is a Single-Price Monopoly Efficient

question 375

Multiple Choice

Is a single-price monopoly efficient?

• A) Yes, because it creates a deadweight loss.
• B) No, because it creates a deadweight loss.
• C) Yes, because consumers gain and producers lose some of their surpluses.
• D) Yes, because consumers lose and producers gain some of their surpluses.
• E) Yes, because it produces the quantity at which MR = MC.

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Definitions:

Total-Cost Curve

A graph that depicts the total cost of producing different quantities of a good or service, considering both fixed and variable costs.

Increasing Rate

Describes a situation where a quantity or metric, such as inflation, interest rates, or population, is growing over time.

Variable Cost

A cost that changes in proportion to the level of output or activity.

Fixed Cost

Fixed charges that stay the same no matter the production or sales volume, like rental costs, salary payments, and insurance rates.