Under Monopoly, a Firm

question 42

Multiple Choice

Under monopoly, a firm:

• A) is a price taker.
• B) maximizes profit by setting marginal cost equal to marginal revenue.
• C) will shut down in the short-run if price falls short of average total cost.
• D) always earns a pure economic profit.

---

Definitions:

Percentage Change

A mathematical calculation that represents the degree of change over time as a proportion of the original value, often used to measure growth or decline.

GDP Deflator

A gauge for pricing of all new, native-produced, conclusive goods and services within an economy, applied to revise nominal GDP in order to compute real GDP.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in a specific period in real terms.

Percentage Change

A mathematical calculation that determines the degree of change over time as a proportion of the original value, often used to measure growth or decline in economic data.