-A Monopolist Would Not Be Able to Make a Positive

question 239

Multiple Choice

-A monopolist would not be able to make a positive profit at any price output combination when

• A) marginal cost is less than average total cost for one more unit of output.
• B) the average variable cost curve is everywhere above the marginal revenue curve.
• C) the minimum point of the average total cost curve lies to the right of the minimum of the average variable cost curve.
• D) the average total cost curve is everywhere above the demand curve.

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Definitions:

Work In Process

Work in process are goods in various stages of production within a factory, not yet completed to become finished goods.

First-In, First-Out

An inventory valuation method where goods first purchased or produced are the first to be sold or used, assuming the earliest inventory costs flow out first.

Conversion Costs

Conversion costs are manufacturing or production costs that include direct labor and overhead expenses, necessary to convert raw materials into finished goods.

Equivalent Units

Equivalent units refer to a conversion measure used in cost accounting to express the amount of work done by manufacturers on units that are only partially completed at the end of an accounting period.