The Profit-Maximizing Behavior of a Monopoly Is Different from That

question 159

Multiple Choice

The profit-maximizing behavior of a monopoly is different from that of a competitive firm in that

• A)their cost structures are different.
• B)a monopoly can control only output level whereas a competitive firm can control only price.
• C)a monopoly can control only price whereas a competitive firm can control only output level.
• D)a monopoly can control both price and output level, but a competitive firm can control only output level.
• E)a monopoly can control both price and output level, whereas a competitive firm can control neither price nor output level.

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Definitions:

Comparative Advantage

The capacity of a party to generate a product or service with a smaller opportunity cost compared to its rivals.

TV Commercials

Short segments of television programming produced and paid for by organizations to convey marketing messages to viewers.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production including machinery used to produce goods.

Resource

An economic or productive factor required to accomplish an activity, or to produce goods and services.