Figure 11-5 -In Which of the Following Ways Is a Monopolist Different

question 98

Multiple Choice

Figure 11-5
-In which of the following ways is a monopolist different from a perfect competitor?

• A)Average cost will continually drop as output expands.
• B)Price is above marginal revenue.
• C)Average total cost equals average fixed costs plus average variable costs.
• D)The demand curve for the industry has a negative slope.

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Definitions:

Fixed Costs

Expenses that do not fluctuate with the level of goods or services produced by the business.

Net Income

The total earnings of a person or organization after subtracting all expenses and taxes.

Variable Costs

Costs that change in proportion to the level of activity or volume of production in a company.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and insurance.