Monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized, mutually beneficial trades are
a. less of a concern for a monopoly than competitive market.
b. offset by the higher profits earned by a monopolist.
c. a function of the reduction in the quantity produced by a monopolist in comparison to a competitive market.
d. All of the above are correct.
c
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If good salespeople are extremely risk averse, then a choice between a fixed-fee contract and a contingent contract
A) avoids a moral hazard. B) will result in all job candidates choosing the contingent contract. C) will result in an efficient contract. D) may not be a good screening device.
As price levels change, the purchasing power of income and wealth has varying effects on the level of consumption spending in an economy. This is called the _____
a. interest rate effect b. exchange rate effect c. wealth effect d. accelerator effect