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Author Question: In the case of an external benefit generated by an activity, such as education, a private subsidy ... (Read 118 times)

Evvie72

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on: Jun 29, 2018
In the case of an external benefit generated by an activity, such as education, a private subsidy for that activity can achieve an efficient outcome.
 
  Indicate whether the statement is true or false

Question 2

What does the deadweight loss from monopoly measure?
 
  What will be an ideal response?


uniquea123

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Reply #1 on: Jun 29, 2018
Answer to Question 1

TRUE

Answer to Question 2

The deadweight loss from monopoly measures the loss to society of having a product produced by a monopoly rather than a perfectly competitive industry. The deadweight loss results from the point that a monopolist produces less output than would a perfectly competitive industry. The monopolist produces less output in order to raise the price of the product and thereby earn an economic profit.


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