Which of the Following Is TRUE for Monopolists

question 114

Multiple Choice

Which of the following is TRUE for monopolists?

• A) They charge a price below average cost, which guarantees above normal profits.
• B) Their marginal revenue increases with output.
• C) They maximize profits by producing at the midpoint of their demand curve.
• D) They produce all units of output for which marginal revenue is greater than or equal to marginal cost.

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Definitions:

Voting Rights

The rights of shareholders to vote on company matters, typically exercised at annual meetings and proportional to the number of shares held.

Dividend Paid

The portion of earnings a company distributes to its shareholders, typically expressed as a dollar amount per share.

Outstanding Shares

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.