Which of the following best explains an economic criticism of unregulated monopolists?
a. Monopolists do not try to minimize their costs of production.
b. Monopolists produce where marginal revenue is greater than marginal costs.
c. Monopolists attempt to produce too many products, and as a result, their prices are high, and consumer's waste time trying to choose between too many options.
d. Monopolists restrict output, and as a result, they fail to produce units that are valued more than the marginal cost of producing them.
Question 2
When Pepsi becomes more expensive relative to other beverages, people will purchase less Pepsi. This observation is known as the:
a. diamond-water paradox.
b. law of diminishing marginal utility.
c. substitution effect.
d. income effect.
Economic and Social Development
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