Which One of the Following Correctly Identifies a Characteristic of a Monopolistic

question 10

Multiple Choice

Which one of the following correctly identifies a characteristic of a monopolistic market?

• A) A monopolist maximizes profit at the point where price = marginal cost.
• B) A monopolist will always earn supernormal profits.
• C) A monopoly firm faces a perfectly elastic demand curve.
• D) There is no excess capacity in a monopoly.

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Definitions:

Division

A distinct part of a larger company that operates semi-independently, typically focusing on a particular product line or market sector.

ROI Calculations

The process of determining the return on investment by dividing the net profit by the initial cost of the investment.

Margin

The difference between the selling price of a good or service and the cost of producing it, often expressed as a percentage of the selling price.

Return on Investment

A measure of the profitability of an investment, calculated as a percentage of the return relative to the investment's cost.