Question

According to Gordon Tullock monopoly:_________

a. profits or rents are subject to rent seeking the welfare cost triangle
b. is subject to rent seeking X-inefficiency
c. is something that differentiates government monopolies from private monopolies
d. the theory of monopoly is superior to the theory of perfect competition

Answer 1

a. profits or rents are subject to rent seeking the welfare cost triangle

Step-by-step explanation:

Monopolies are businesses that have sole control of the supply and pricing of a product. Dead weight loss used to be regarded as consumer surplus that does not affect the amount of product that a monopolist can provide.

Gordon Tullock however argued that loss also occurs when businesses are seeking to be a monopoly. There is an associated cost on obtaining and maintaining a monopoly called rent seeking.

Also an additional cost as result of dead weight loss due to payment of tarrif. This can result from net welfare benefit or loss as a result of government policy change (this is referred to as welfare triangle).