If a Monopoly Firm Produces the Quantity of Output at Which

question 32

Multiple Choice

If a monopoly firm produces the quantity of output at which MR = MC, and charges a price greater than average total cost, it necessarily

• A)minimizes the difference between total fixed cost and total variable.
• B)maximizes the difference between total fixed cost and total variable cost.
• C)maximizes total revenue.
• D)earns profit.

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Definitions:

Receipts

Written acknowledgments of having received something, typically used for transactions and proof of payment.

Accrual Basis

An accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.

Cash Basis

An accounting method where revenues and expenses are recognized when cash is received or paid, not when incurred.

Operations

The day-to-day activities required for the running of a business or an organization, focusing on the production and delivery of goods and services.