Which of the following policies might eliminate the distortion associated with monopoly? The imposition of a:
A)subsidy on the monopoly produced good.
B)subsidy on competitively produced goods.
C)sales tax on one of the competitively produced goods.
D)sales tax on the monopoly produced good.

Question

Quizplus · Accepted Answer

A subsidy on the monopoly-produced good can reduce the price to consumers, potentially increasing output to a level closer to what would be seen in a competitive market, thus reducing the distortion associated with monopoly pricing.

Which of the Following Policies Might Eliminate the Distortion Associated