If a Monopolist Finds That at the Present Level of Output

question 113

Multiple Choice

If a monopolist finds that at the present level of output marginal revenue exceeds marginal cost, the firm should:

• A) shut down.
• B) expand output.
• C) maintain the current output.
• D) reduce output (but still produce).
• E) raise prices.

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Definitions:

Sales

The exchange of a product or service for money, typically seen as a unit of measurement for business performance.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Fixed Assets

Long-term tangible assets, such as buildings, machinery, and equipment, used in the operations of a business and not expected to be converted to cash in the short term.

Balanced Scorecard

A system for strategic planning and management designed to synchronize business actions with the organization's strategy and vision, bolster communication within and outside the organization, and oversee the performance of the organization in relation to its strategic targets.