{"id":54505,"date":"2024-04-16T00:11:18","date_gmt":"2024-04-16T00:11:18","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=54505"},"modified":"2024-04-16T00:11:18","modified_gmt":"2024-04-16T00:11:18","slug":"the-economists-objections-to-monopoly-rest-on-which-of-the-following-grounds","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-economists-objections-to-monopoly-rest-on-which-of-the-following-grounds\/","title":{"rendered":"The economist&#8217;s objections to monopoly rest on which of the following grounds?"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;There is a transfer of income from consumers to the monopolist&#8221; option2=&#8221;There is welfare loss as resources tend to be misallocated under monopoly&#8221; option3=&#8221;Both A and B are incorrect&#8221; option4=&#8221;Both A and B are correct&#8221; correct=&#8221;option2&#8243;]<!--more--><\/p>\n<p>The correct answer is: Both A and B are correct.<\/p>\n<p>A monopoly is a market structure in which there is only one seller of a good or service. This means that the monopolist has a great deal of market power and can charge a higher price than would be possible in a competitive market. As a result, consumers are worse off under monopoly than they would be under competition.<\/p>\n<p>In addition, monopolies tend to misallocate resources. This is because the monopolist is not subject to the same competitive pressures as firms in a competitive market. As a result, the monopolist may produce less than the socially optimal level of output and charge a higher price than would be necessary to cover costs.<\/p>\n<p>Both of these factors lead to a welfare loss under monopoly. This means that society as a whole is worse off under monopoly than it would be under competition.<\/p>\n<p>Here is a more detailed explanation of each option:<\/p>\n<ul>\n<li>Option A: There is a transfer of income from consumers to the monopolist.<\/li>\n<\/ul>\n<p>Under monopoly, the monopolist is able to charge a higher price than would be possible in a competitive market. This means that consumers pay more for the good or service, and the monopolist receives more revenue. This is a transfer of income from consumers to the monopolist.<\/p>\n<ul>\n<li>Option B: There is welfare loss as resources tend to be misallocated under monopoly.<\/li>\n<\/ul>\n<p>As mentioned above, monopolies tend to misallocate resources. This is because the monopolist is not subject to the same competitive pressures as firms in a competitive market. As a result, the monopolist may produce less than the socially optimal level of output and charge a higher price than would be necessary to cover costs. This leads to a welfare loss, as society as a whole is worse off under monopoly than it would be under competition.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;There is a transfer of income from consumers to the monopolist&#8221; option2=&#8221;There is welfare loss as resources tend to be misallocated under monopoly&#8221; option3=&#8221;Both A and B are incorrect&#8221; option4=&#8221;Both A and B are correct&#8221; correct=&#8221;option2&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-54505","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The economist&#039;s objections to monopoly rest on which of the following grounds?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/the-economists-objections-to-monopoly-rest-on-which-of-the-following-grounds\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The economist&#039;s objections to monopoly rest on which of the following grounds?\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;There is a transfer of income from consumers to the monopolist&#8221; 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