{"id":204293,"date":"2025-03-21T17:01:49","date_gmt":"2025-03-21T17:01:49","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=204293"},"modified":"2025-03-21T17:01:51","modified_gmt":"2025-03-21T17:01:51","slug":"a-nondiscriminating-pure-monopolist-is-generally-viewed-as","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/21\/a-nondiscriminating-pure-monopolist-is-generally-viewed-as\/","title":{"rendered":"A nondiscriminating pure monopolist is generally viewed as"},"content":{"rendered":"\n<p>A nondiscriminating pure monopolist is generally viewed as: <\/p>\n\n\n\n<p>A) productively efficient, but allocatively inefficient. <\/p>\n\n\n\n<p>B) productively inefficient, but allocatively efficient. <\/p>\n\n\n\n<p>C) both productively and allocatively inefficient. <\/p>\n\n\n\n<p>D) both productively and allocatively efficient.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is:<\/p>\n\n\n\n<p><strong>C) both productively and allocatively inefficient.<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>A <strong>nondiscriminating pure monopolist<\/strong> is a firm that operates as the sole provider of a product or service without charging different prices to different consumers. This type of monopolist maximizes profit by producing at the quantity where <strong>marginal cost (MC) equals marginal revenue (MR)<\/strong> rather than where <strong>MC equals price (P)<\/strong>, which would be the case in a perfectly competitive market. This results in both <strong>productive and allocative inefficiency<\/strong> for the following reasons:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>1. Allocative Inefficiency:<\/strong><\/h4>\n\n\n\n<p>Allocative efficiency occurs when resources are distributed in a way that maximizes total societal welfare, meaning price (P) equals marginal cost (MC). However, in a monopoly:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The monopolist sets price <strong>above marginal cost (P > MC)<\/strong>.<\/li>\n\n\n\n<li>This leads to <strong>underproduction<\/strong> relative to the socially optimal output level.<\/li>\n\n\n\n<li>A deadweight loss arises, meaning some consumer and producer surplus is lost, and society does not maximize total welfare.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>2. Productive Inefficiency:<\/strong><\/h4>\n\n\n\n<p>Productive efficiency occurs when a firm produces at the lowest possible cost per unit, which happens at the minimum point of the <strong>average total cost (ATC) curve<\/strong>. However, in a monopoly:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The monopolist produces at a lower quantity than what would occur in perfect competition.<\/li>\n\n\n\n<li>This means the firm does not fully exploit economies of scale or operate at the lowest point of the ATC curve.<\/li>\n\n\n\n<li>As a result, the firm incurs higher costs per unit than necessary, making it <strong>productively inefficient<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>In conclusion, a nondiscriminating monopolist fails to achieve both allocative and productive efficiency, leading to an inefficient market outcome where consumers face higher prices and lower output than in a competitive market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A nondiscriminating pure monopolist is generally viewed as: A) productively efficient, but allocatively inefficient. B) productively inefficient, but allocatively efficient. C) both productively and allocatively inefficient. D) both productively and allocatively efficient. The correct answer and explanation is : The correct answer is: C) both productively and allocatively inefficient. Explanation: A nondiscriminating pure monopolist is [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-204293","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/204293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=204293"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/204293\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=204293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=204293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=204293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}