If a Monopolist Had No Production Costs, It Would Produce

question 56

Multiple Choice

If a monopolist had no production costs, it would produce the output where marginal revenue intersects the quantity axis. At this point, the price elasticity of demand would be:

• A) 1.
• B) perfectly inelastic.
• C) zero.
• D) perfectly elastic.

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Definitions:

Return

The profit or loss derived from an investment or business operation after all expenses are accounted for.

Investor

An individual or institution that allocates capital with the expectation of receiving financial returns, involving various forms of assets.

Stockholders' Claim

The rights of shareholders to a company's assets, typically after debts have been paid.

Net Income

Net Income is the total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.