Which of the Following Statements Best Describes the Price, Output

question 98

Multiple Choice

Which of the following statements best describes the price, output, and profit conditions of monopoly?

• A) Price will equal marginal cost at the profit-maximizing level of output and profits will be positive in the long run.
• B) Price will always equal average variable cost in the short-run and either profits or losses may result in the long run.
• C) In the long run, positive economic profit will be eliminated.
• D) None of the above.

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Definitions:

Restatement

A revision or rewriting of legal documents or statutes for clarification and simplification without changing the fundamental meaning.

Second

A unit of time equal to one sixtieth of a minute, used as a standard measure of time.

Contracts

are legally binding agreements between two or more parties that are enforceable by law.

Promissory Estoppel

A legal principle preventing a party from withdrawing a promise made to a second party if the second party has reasonably relied on that promise to their detriment.