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In: Economics

West Virginia University has provided a monopoly to the Coca-Cola company for the sale and distribution...

  1. West Virginia University has provided a monopoly to the Coca-Cola company for the sale and distribution of beverages on campus. Economic theory tells us this comes with an amount of deadweight loss and a transfer of social benefits from the consumers to Coca-Cola, at least compared to having a perfectly competitive beverage market on campus. Why might the cost to society associated with this monopoly be understated?

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