A Profit-Maximizing Monopolist

question 53

Multiple Choice

A profit-maximizing monopolist

• A) is guaranteed to lose money because of a lack of competition.
• B) is not guaranteed to make a positive profit.
• C) is guaranteed to make a positive profit, hence the desire to be a monopolist.
• D) is guaranteed to make a non-negative profit, otherwise government would step in to assist.

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Definitions:

Patentable

Capable of being protected by a patent, which grants the holder exclusive rights to an invention or process for a certain period.

Imitation

The action of using someone or something as a model and attempting to replicate their behavior, strategy, or design.

R&D Expenditures

Financial investments made in the research and development sector, aimed at fostering innovation, creating new products, improving existing products, or discovering new technologies.

Expected Rate of Return

The predicted yield that an investment will generate over a specified period, taking into account both the probability of gains and the possibility of losses.