Refer to Figure 15-11. What is the size of the deadweight loss prior to Verizon entering the market and what happens to this deadweight loss after Verizon does enter the market?
A) The deadweight loss of area C+D is converted to consumer surplus
B) The total deadweight loss is the area D+F; D is converted to consumer surplus and F to producer surplus.
C) The deadweight loss of area D is converted to consumer surplus.
D) The deadweight loss of area D is converted to producer surplus.
Question 2
A prisoner's dilemma leads to a noncooperative equilibrium.
Indicate whether the statement is true or false
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