When compared to a perfectly competitive industry, in a monopoly:
A) both consumer surplus and social surplus are larger.
B) consumer surplus is lower but social surplus is larger.
C) both consumer surplus and social surplus are smaller.
D) consumer surplus is higher but social surplus is smaller.
C
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The amount of a tax paid by the buyers will be smaller the
A) more elastic the demand and the more inelastic the supply. B) more inelastic the demand and the more elastic the supply. C) more inelastic are both the supply and demand. D) more elastic are both the supply and demand.
Remembering that demand elasticity is defined as the percentage change in quantity divided by the percentage change in price, if price decreases and, in percentage terms, quantity rises more than price has dropped, total revenue will
A) increase. B) decrease. C) remain the same. D) either increase or decrease.