If both a monopoly and a competitive market with the same marginal cost would produce a quantity that is greater than the social optimum in a market because of externalities, then
A) welfare is greater under monopoly.
B) welfare is greater under competition.
C) welfare is the same for both market structures.
D) the social optimum must be zero.
A
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When Economist Truman Bewley surveyed managers about their employment decisions during a recession, he found that:
A. they are indifferent between using layoffs and using wage cuts during a recession. B. they feel guiltier about reducing workers' wages than they do about firing workers. C. it is easier to reduce wages slightly for all workers than to fire some workers. D. it is easier to fire some workers and leave the wages of the other workers unchanged.
In the Solow growth model, the law of motion of capital takes into account
A) the residential nature of houses. B) the mobility of capital. C) the depreciation of old capital. D) the cost of shipping and installing capital.