If a Monopolist Sets Her Output Such That Marginal Revenue

question 2

Multiple Choice

If a monopolist sets her output such that marginal revenue, marginal cost and average total cost are equal, economic profit must be:

• A) negative.
• B) positive.
• C) zero.
• D) indeterminate from the given information.

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Definitions:

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity.

Net Cash

The difference between an entity's total cash inflows and total cash outflows over a specific period.

Operating Activities

Activities that are directly related to the primary revenue-generating operations of a business.

Net Cash

The difference between a company’s total cash inflows and outflows within a given period, reflecting the company's liquidity position.