Author Question: With rent seeking by a monopoly A) the monopolist's average total costs will increase so that its ... (Read 64 times)

tnt_battle · **on:** Jun 29, 2018

With rent seeking by a monopoly

A) the monopolist's average total costs will increase so that its average total cost curve is tangent to the demand curve at the profit-maximizing price.
B) a monopoly uses all of what would be its economic profit to prevent other firms from taking its economic rent.
C) the full deadweight loss of monopoly is larger than in the absence of rent seeking.
D) All of the above answers are correct.

Question 2

In the above figure, if no government intervention occurs, at the unregulated competitive market equilibrium, the marginal cost of the externality is ________ per unit.

A) 3
B) 4
C) 6
D) 7