(Scenario: Home Monopolist) a Monopolist Faces a Demand Curve Given

question 105

Multiple Choice

(Scenario: Home Monopolist) A monopolist faces a demand curve given by P = 60 - 2Q and has total costs given by TC = Q². Its marginal revenue is MR = 60 - 4Q and its marginal cost is MC = 2Q. Compared with the no-trade equilibrium, producer surplus ___________ when the monopolist engages in free trade.

• A) increases
• B) decreases
• C) remains the same
• D) first increases, then decreases

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Definitions:

False Pretenses

Misrepresenting facts or intentional deception to obtain property, funds, or services unlawfully.

Theft

The act of taking someone else's property without permission with the intent to keep it permanently.

Goods

Physical items that are produced, bought, or sold, typically in the context of commerce.

Fraudulent Appropriation

The illegal act of taking something that belongs to someone else for one's own use, under false pretenses or through deceit.