How does monopoly product quality compare to the quality a social planner would choose?
a. The monopolist targets the marginal consumer's valuation of quality, whereas the social planner targets the average consumer's. This leads the monopolist to make inefficiently low-quality products.
b. The monopolist targets the marginal consumer's valuation of quality, whereas the social planner targets
the average consumer's. This leads the monopolist to make inefficiently high-quality products.
c. There is no difference due to a standard neutrality argument.
d. None of the above.
d
Economics
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It is possible to observe a positive nominal interest rate together with a negative real interest rate
a. True b. False Indicate whether the statement is true or false
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Inflation is undesirable because it:
A. arbitrarily redistributes real income and wealth. B. invariably leads to hyperinflation. C. usually is accompanied by declining real GDP. D. reduces everyone's standard of living.
Economics