One Way a Monopoly Can Convert Additional Consumer Surplus into Economic

question 138

Multiple Choice

One way a monopoly can convert additional consumer surplus into economic profit is to

• A) become more competitive.
• B) produce where price equals average total cost.
• C) raise prices.
• D) lower prices.
• E) price discriminate.

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Definitions:

Operating Assets

Resources owned by a business that are used in its day-to-day operations to generate revenue and are expected to provide benefits in the future.

Controllable Margin

A measure of profitability that represents the amount of revenue left after deducting all controllable expenses.

ROI

Return on Investment, a performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.

Controllable Margin

The portion of profit or loss that can be directly controlled or influenced by management decisions.