If a Monopoly Engages in Rent Seeking

question 49

Multiple Choice

If a monopoly engages in rent seeking,
i.its average total cost curve is lower than otherwise.
ii.it might or might not make an economic profit depending on how many other competitors also are rent seeking.
iii.it necessarily incurs an economic loss.

• A) i only
• B) ii only
• C) iii only
• D) i and ii
• E) i and iii

Understand the relationship between monopolist's marginal revenue, marginal cost, and profit maximization.

Distinguish monopoly profits and how they are calculated.

Recognize the deregulation and the effects on monopolistic markets.

Comprehend the conditions under which monopolies can sustain profits or incur losses.

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