A Monopoly Occurs When

question 13

Multiple Choice

A monopoly occurs when

• A)A firm gains some level of market power.
• B)A firm charges a price greater than the equilibrium price.
• C)There is only one producer of a particular good or service.
• D)There is an underproduction of a good or service by a firm.

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Definitions:

Outstanding Principal

The remaining amount of money owed on a loan or mortgage, not including interest, that has yet to be repaid.

Equal Payments

Regular payments of the same amount made over a period of time.

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods once a year.

Interest

The fee or rent that lenders charge for the use of their money.