When a Monopolist Chooses the Output That Maximizes Profits, We

question 125

Multiple Choice

When a monopolist chooses the output that maximizes profits, we know that MR = MC and also that P > MR. This is inefficient because

• A)​the monopolist is not minimizing costs.
• B)​the monopolist is the only producer in the market.
• C)​the monopolist fails to make transactions where the marginal benefit is greater than the marginal cost.
• D)​there are entry barriers.

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Definitions:

Debits

Entries made on the left-hand side of an account record in double-entry bookkeeping, indicating increases in assets or expense accounts, or decreases in liabilities, equity, or revenue accounts.

Account Balance

The amount of money present in a financial account at any given moment, which can be positive (credits) or negative (debits).

Chart of Accounts

An organized list of all the accounts in a company's general ledger, used for recording and reporting financial transactions.

Journal

A detailed record where all financial transactions of a business are initially recorded before being transferred to accounts in the ledger.