Suppose you are advising a mayoral candidate in your town. The candidate's platform includes strong opposition to monopoly suppliers because consumer welfare is compromised by monopoly pricing. Which of the following statements would present your candidate with an alternative view about why it may make sense to tolerate the existence of some monopoly firms? Instructions: You may select more than one answer.

a. Some goods are too dangerous or important to let "just anyone" produce them.

b. Some goods may not exist if it were not for the monopoly profits that a patent ensures to create incentives for research and development.

c. While monopolies reduce consumer surplus they increase overall social welfare through increased producer surplus.

d. Monopolies reduce average total cost when there are very large fixed costs in production.

Question

Business

Heath Golden

30 July, 09:59

Suppose you are advising a mayoral candidate in your town. The candidate's platform includes strong opposition to monopoly suppliers because consumer welfare is compromised by monopoly pricing. Which of the following statements would present your candidate with an alternative view about why it may make sense to tolerate the existence of some monopoly firms? Instructions: You may select more than one answer.

a. Some goods are too dangerous or important to let "just anyone" produce them.

b. Some goods may not exist if it were not for the monopoly profits that a patent ensures to create incentives for research and development.

c. While monopolies reduce consumer surplus they increase overall social welfare through increased producer surplus.

d. Monopolies reduce average total cost when there are very large fixed costs in production.

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Answers (1)

Know the Answer?

Bruno Kirby · Answer 1

Consider the following explanation

Explanation:

Some goods are too dangerous or important to let "just anyone " produce them, example, railway or some defence equipment. (A),

Monopolies reduce the total cost when they are very large fixed cost in production. that is when they are achieving economies of scale. "d".

An providing some monopoly power ensure they are inventing and that make the monopoly important that is why the government protects them through patents. (B).