The Exclusive Gift Company Has a Monopoly Over the Sale

question 30

Multiple Choice

The Exclusive Gift Company has a monopoly over the sale of gold hula hoops. This company is currently pricing and producing where marginal revenue is equal to marginal cost. It is selling 50 gold hula hoops at a price of $5,000 each. Total costs for the company are $300,000 of which fixed costs are $100,000. You are hired as an economic consultant to this company. You should advise this monopolist to

• A) shut down in the short run and exit the industry in the long run.
• B) produce in the short run and expand capacity in the long run.
• C) produce in the short run but exit the industry in the long run if conditions do not change.
• D) shut down in the short run but expand capacity in the long run if conditions do not change.

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Definitions:

Organizational Cultures

The shared values, beliefs, and practices that shape the social and psychological environment of a business organization.

Adopting Values

The process through which individuals or organizations integrate new beliefs, attitudes, and standards into their existing value systems.

Organizational Socialization

The process by which a new employee learns the values, norms, and expected behaviors of an organization to become an effective member.

Cultural Values

The core principles and ideals upon which an entire community exists and functions, deeply influencing people's behaviors and perceptions.