Suppose a Lazy Monopolist's Fixed Costs Are Lower Than the Fixed

question 18

Multiple Choice

Suppose a lazy monopolist's fixed costs are lower than the fixed costs of an efficient monopolist. In all other respects, the monopolists are the same. Which of the following statements about this monopolist is true?

• A) It charges a higher price than the monopolist producing efficiently.
• B) It charges a lower price than the monopolist producing efficiently.
• C) Its total revenue is the same as the monopolist producing efficiently.
• D) It produces less than the monopolist producing efficiently.

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Definitions:

Heartwood

The dense inner part of a tree trunk, yielding the hardest timber, providing strength, and often darker than the surrounding sapwood.

Vessels

Hollow tubes that carry fluids such as blood, lymph, or sap within an organism, including arteries, veins, and capillaries.

Mycorrhizae

Symbiotic associations between the roots of plants and a fungus, enhancing nutrient and water uptake for the plant and providing carbohydrates for the fungus.

Atmospheric Nitrogen

The form of nitrogen gas (N2) that makes up about 78% of the Earth's atmosphere, largely inert and not directly usable by most organisms.