A Monopoly

question 528

Multiple Choice

A monopoly

• A)can set the price it charges for its output and earn unlimited profits.
• B)takes the market price as given and earns small but positive profits.
• C)can set the price it charges for its output but faces a downward-sloping demand curve so it cannot earn unlimited profits.
• D)can set the price it charges for its output but faces a horizontal demand curve so it can earn unlimited profits.

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Definitions:

Mechanical Reaper

A machine invented in the 19th century that significantly increased the efficiency of harvesting crops.

Capital

Resources made and used by people to produce and distribute goods and services, including tools, machinery, and buildings.

Bulldozer

A heavy piece of equipment used in construction to move or remove large amounts of earth or debris, featuring a large flat blade.

Savings Bond

A government bond that offers a fixed interest rate over a fixed period of time, often considered a safe investment.