Which of the Following Best Explains Why the Monopolist's Marginal

question 22

Multiple Choice

Which of the following best explains why the monopolist's marginal revenue is less than the selling price?

• A) To sell more units, the monopolist must reduce price on all units sold.
• B) As the monopolist expands output, the average total cost will decline.
• C) The monopolist charges each consumer the highest possible price.
• D) When a firm has a monopoly, consumers have no choice other than to pay the price set by the monopolist.

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Definitions:

Dividends Declared

Profits that a company's board of directors has decided to distribute to its shareholders, usually in the form of cash payments or additional shares.

Shareholders' Equity

The remaining value of a company's assets after liabilities are subtracted, which signifies the ownership stake of the shareholders.

Debits

An accounting entry that increases an asset or expense account, or decreases a liability or equity account.

Credits

Entries in accounting that increase liabilities or equity or decrease an asset or expense.