If a Monopolist Is Forced to Set Price Equal to Average

question 112

Multiple Choice

If a monopolist is forced to set price equal to average total cost, economic profit

• A)will be negative, and the monopolist may go out of business
• B)will be zero
• C)will be positive
• D)will be negative, and the firm will stay in business if there are significant fixed costs
• E)may be positive, negative, or zero

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Definitions:

Social Loafing

A group dynamic where individual contributions towards a goal diminish in comparison to efforts made when working alone.

Exert

To apply or bring to bear a force, influence, or quality, typically with effort.

Common Goal

A shared aim or objective by a group of people, which often motivates collective action toward its achievement.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members, often leading to a more pronounced stance.