Which One of the Following Is True for a Single-Price

question 89

Multiple Choice

Which one of the following is true for a single-price monopolist but not for a perfectly competitive firm?

• A)The firm maximizes profit by setting marginal cost equal to marginal revenue.
• B)The firm is a price-taker.
• C)The firm can sell any level of output at any price it sets.
• D)The firm's marginal cost is less than price.
• E)The firm's marginal revenue curve is horizontal.

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Definitions:

Contribution Margin Ratio

A financial metric that measures how much of a company's revenue is left over after variable costs are subtracted, expressed as a percentage of sales revenue.

Variable Expense Ratio

A ratio computed by dividing variable expenses by sales.

Operating Leverage

A financial concept that measures the proportion of fixed costs in a company's cost structure, indicating its sensitivity to changes in sales volume.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.