1.Introducing competition to where a natural monopoly already exists may result in society wasting resources.

True or False?

2.A monopoly maximizes their profit by producing the quantity where

A. Marginal Revenue is equal to Marginal Cost

B. Highest price possible can be charges

C. Price is equal to average total cost

D. Price is equal to Marginal Cost

3.Allocative efficiency occurs where Price=Marginal Cost

Productive efficiency occurs where MC=ATC (ATC is at the minimum)

Monopolies are:

A. Allocative efficient

B. Productive efficient

C. Allocative and Productive efficient

D. neither Allocative nor productive efficient