The existence of a natural monopoly stems from the size of the firm relative to the total market demand for the product of that firm

Refer to Figure 4-15. As a result of the tax, is there a loss in consumer surplus?

A) No, because the producer pays the tax. B) No, because the market reaches a new equilibrium C) No, because consumers are charged a lower price to cover their tax burden. D) Yes, because consumers pay a price above the economically efficient price.

Why is a typical person likely to gather more information when buying a new car than when voting for a member of Congress?

A) because it is less costly to acquire information about consumer items than it is about political candidates B) because a person's preferences are more likely to be met with little effort in the political sphere but this is not the case when buying a car in the private marketplace C) because buying a new car affects a person more immediately and personally compared to voting for a member of Congress; in the latter, a person's vote is only one of many voters and therefore, not likely to have a large impact on the outcome D) because the effects of buying a car are long term while a member of Congress has a relatively short tenure