The deadweight loss from monopoly arises because a. consumers who buy the good have to pay more than marginal cost, reducing their consumer surplus. b. the monopoly firm chooses a quantity that fails to equate price and average revenue. c. some potential consumers who forgo buying the good value it more than its marginal cost. d. the monopoly firm makes higher profits than a competitive firm would.

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.