"Monopolists Do Not Worry About Efficient Production and Minimizing Costs

question 221

Multiple Choice

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

• A)false; price increases will mean fewer sales, which may lower profits.
• B)true; this is the primary reason why economists believe that monopolies result in economic inefficiency.
• C)false; the monopolist is a price taker.
• D)true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices.

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Definitions:

Bid Price

The maximum price that a buyer is willing to pay for a security or commodity.

Manager's Objective

The goals that are set by a company's management to be achieved through the operation of the organization.

Construction Firms

Companies specializing in constructing buildings, infrastructure, and other physical structures.

Bid Prices

The highest price that a buyer is willing to pay for an asset in the financial markets.