Monopolies May Not Be Interested in Exploiting Economies of Scale

question 66

Multiple Choice

Monopolies may not be interested in exploiting economies of scale because:

• A) they have to sell goods at the market price.
• B) they cannot control supply in the market
• C) they do not have any competitors.
• D) they earn normal economic profits in the short run.

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Definitions:

Consolidated Expenses

The total expenses of a group of companies after eliminating intercompany transactions, reported in consolidated financial statements.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

Additional Paid-In Capital

Additional Paid-In Capital (APIC) is the amount of money that investors have paid for shares above their nominal value during public offerings, reflecting capital that a company receives in excess of the par value of its stock.

Business Combination

A business combination occurs when two or more businesses merge or when one business acquires another, resulting in the consolidation of assets and liabilities under one entity.