A Monopoly

question 44

Multiple Choice

A monopoly

• A)faces a perfectly elastic demand.
• B)ignores the demand curve because it is the only seller.
• C)can raise the price it charges only if it decreases the quantity that it sells.
• D)can raise the price it charges and increase the quantity that it sells.
• E)faces a perfectly inelastic demand.

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Definitions:

Negative Externality

A cost that affects a party who did not choose to incur that cost, often seen in environmental pollution where the public bears the cost not reflected in the market price.

Lawn Mowing

Lawn mowing refers to the act of cutting or trimming the grass in a lawn to maintain its appearance and health, often performed as a routine landscaping activity.

External Costs

Costs of a transaction that affect people other than the buyer or seller and are not reflected in the prices.

Full Costs

Full costs encompass all expenses associated with producing a product or offering a service, including both direct and indirect costs.