Refer to the Graph Shown

question 119

Multiple Choice

Refer to the graph shown. Suppose the industry is currently perfectly competitive but then is taken over by a monopolist. Assuming that the monopolist maximizes profit:

• A) the price of computers will increase from $400 to $600 but there will be no change in quantity demanded.
• B) the price of computers will increase from $400 to $600 and the quantity demanded will fall from 400 to 200.
• C) the price of computers will decrease from $600 to $400 and the quantity demanded will rise from 200 to 400.
• D) there will be no effect on the price of computers.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, a key indicator of a company's profitability.

Interest Expense

The financial cost experienced by an entity over a duration for utilizing borrowed money.

Sources And Uses Of Cash

A financial statement that summarizes where a business obtained its money (sources) and how it spent it (uses).

Predicting Cash Flows

The process of estimating the amount of money that will move in and out of a business in a future period.