Answered: . It is economically more efficient to…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 27CTQ: For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and...

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Indicate whether the statement is TRUE, FALSE, or UNCERTAIN and explain why.

1. It is economically more efficient to have a monopolist that discriminates perfectly
than a monopolist that sets a single price.

2. If a monopsonist faces a perfectly elastic supply curve, there will be no deadweight
loss relative to the competitive outcome

3. In a Cournot duopoly market, the two firms agree to produce half of the monopoly
output level for that market and split the resulting profit. Since the monopoly profit is the highest profit that can be obtained, the two firms will always stick to that agreement even if it’s not legally (or in any other way) binding.

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