"Monopolists Do Not Worry About Efficient Production and Minimizing Costs

question 221

Multiple Choice

"Monopolists do not worry about efficient production and minimizing costs since they can just pass along any increase in costs to their consumers." This statement is

• A)false; price increases will mean fewer sales, which may lower profits.
• B)true; this is the primary reason why economists believe that monopolies result in economic inefficiency.
• C)false; the monopolist is a price taker.
• D)true; consumers in a monopoly market have no substitutes to turn to when the monopolist raises prices.

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Definitions:

Ice Cream

A sweetened frozen food typically eaten as a snack or dessert, made from dairy milk or cream, and often flavored.

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A form of asphyxia due to the aspiration of fluid into the airways, caused by submersion in liquid.

Cause-and-effect Relationships

Connections between events where one is the result of the other(s), indicating a causal relationship.

Experiment

A research method in which the investigator manipulates one (independent) variable under carefully controlled conditions and observes whether there are changes in a second (dependent) variable as a result.