The Profit-Maximizing Output of a Pure Monopoly Is Not Socially

question 331

Multiple Choice

The profit-maximizing output of a pure monopoly is not socially optimal, because in equilibrium

• A)price equals minimum average total cost.
• B)marginal revenue equals marginal cost.
• C)marginal cost exceeds price.
• D)price exceeds marginal cost.

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Definitions:

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell products, and collect cash from customers.

Financial Data

Information relating to the financial status or performance of a company, including income, expenses, assets and liabilities.

Sales On Account

Transactions where goods or services are sold and payment is deferred, creating accounts receivable for the seller.

Average Sale Period

The average time period that items remain in inventory before being sold, indicating the liquidity of inventory.