FIGURE 10- 4 Suppose a Monopolist Faces the Demand Curve

question 29

Multiple Choice

FIGURE 10- 4 Suppose a monopolist faces the demand curve and cost curves shown below.

-A monopoly is distinguished from a firm operating under any other market structure in the following way: the monopoly

• A)does not produce at a profit- maximizing level of output.
• B)faces a demand curve which is identical to the market demand curve.
• C)can choose its output level.
• D)charges a price higher than its average revenue.
• E)can choose its level of cost.

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Definitions:

Sole Proprietorship

A simple business structure where a single individual owns, manages, and is responsible for all aspects of the business, including liabilities.

Partnership

A form of business where two or more people agree to contribute resources to start and operate a business together.

Entrepreneur

An individual who creates, organizes, and operates a business venture, taking on greater than normal financial risks in order to do so.

Business Plan

A formal document detailing a business's objectives, strategies, target market, and financial projections.