10. Which of the following represents the nature of a monopolist\'s deadweight l

Question

10. Which of the following represents the nature of a monopolist's deadweight loss? O It is not possible to equate price with marginal cost when demand is inelastic. O It is a fact that people are willing to spend a lot of money for small improvements in quality Some consumers are willing to pay more than the monopolist's marginal cost of production, but the monopolist does not produce these units. Unlike competitive markets, there are consumers with unsatisfied wants. 11. In which of the following scenarios will automobile prices be the lowest? OA monopoly automobile company buys its steel from a monopoly steel producer. O A monopoly automobile company buys its steel from a competitive steel producer. OA competitive automobile company buys its steel from a competitive steel producer 0 A competitive automobile company buys its steel from a monopoly steel producer

Explanation / Answer

Answer 10:

Option C. Deadweight loss arises some consumers are willing to pay more than the monopolist's cost for certain units but monopolist does not produce these units as it will lead to decline in prices of the goods sold by the monopolist.

Answer 11:

Option C. In the case of competitive market structure in botth the markets, Price will be equal to Marginal Cost.

Answer 13 :

Option A. A monopoly firm is always productively inefficient.

Answer 14:

Option B. Natural monopoly as the average cost curve is downward sloping curve and not U shaped in Natural monopoly.

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