If a Monopoly Suddenly Became a Perfectly Competitive Industry

question 146

Multiple Choice

If a monopoly suddenly became a perfectly competitive industry,
Equilibrium output would _________, and the equilibrium price would
_________.

• A)increase; increase
• B)decrease; decrease
• C)increase; decrease
• D)decrease; increase

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Definitions:

Non-Controlling Interest

The portion of equity in a subsidiary not owned directly or indirectly by the parent company.

Fair Value Enterprise Method

A valuation method where a business is valued based on the present value of its projected future earnings or cash flows, adjusted to their market value.

Consolidated Balance Sheet

A financial statement showing the combined assets, liabilities, and equity of a parent company and its subsidiaries as if they were a single entity.

Fair Value Enterprise Method

An approach to valuation that estimates the price at which an entire business would exchange between knowledgeable and willing parties.